AW36/06

Application in respect of Mr DM

Background

This is an application for an Intervention Order in the affairs of an adult, brought by his three (adult) children. The circumstances are sufficiently novel, but also sufficiently important, as to justify comment on the wide range of powers which the court has under the Adults with Incapacity (Scotland) Act and which enable it to ensure that the affairs of adults who have lost the capacity to order them on their own behalf are properly regulated.

Circumstances

These are that the adult is 81 years old, and suffers from Alzheimer's Disease, being wholly unable to communicate. He is incapable within the meaning of the Act. He was married with three children, two sons and one daughter, who are the applicants. In 1997, when he still had full capacity to act, he granted in favour of his two sons a power of Attorney which contains a full range of powers. It predates the Act of 2000, but does satisfy the requirements referred to in that Act of constituting a continuing Power of Attorney, allowing his attorneys to continue to act, which they still do, in the event of his losing capacity to do so. It does not however, give them the power to do what is proposed in the application, and they seek the authority of the court to grant them that power in the form of an Intervention Order.

The adult's wife, sadly, passed away on 2 February 2005. In August 2000, she had executed a will, appointing the three applicants as her executors. In anticipation of the prospect that she would survive her husband, which unhappily did not prove to be the case, she made no provision in the will in his favour, leaving her entire estate to be distributed equally amongst the three applicants, her children. In the event of her pre-deceasing her husband, the adult, he would of course be entitled to legal rights as a matter of the general law of succession, and that is what has happened.

The intention of both parties had been that her estate would pass directly to their children. However, the existence of his legal right qua relict has meant that he is entitled to claim the appropriate portion of her estate. If he retained the capacity to decide such matters for himself, he would have been entitled to elect not to make such a claim, thus ensuring that the whole of his late wife's estate devolved immediately to their children, as they had both intended.

Unhappily, he does not retain that capacity, and nor do his attorneys have the power to make such a decision on his behalf. The value of his legal rights is a reasonably substantial amount of money. He has an estate in his own name, which is again of reasonable size, and which is administered on his behalf by his attorneys. The capital is invested and produces income. He is now resident in a care home, for which fees are charged, but even with the obligation to meet these, his estate is in fact increasing in size, not diminishing. There is therefore, in the circumstances, no need for his estate to be increased any further by the addition of a proportion of his late wife's estate, and which was in any event always intended by both of them to pass directly to their children. The argument therefore is that he would derive no benefit by laying claim to his legal right of entitlement to a portion of his late wife's estate.

The application accordingly seeks to have the court intervene in his affairs by granting authority to the applicants to execute on his behalf a discharge, or renunciation, of his ius relicti in the estate of his late wife. Once that is done, they can complete the administration of her estate.

Other Considerations

I was initially concerned about the critical question of benefit to the adult, and about the fact that the principal benefit would be to the applicants, and not the adult. I was also concerned about the legality of he proposed step to reduce the extent of the adult's assets, and about the issue of conflict of interest, since the applicants were wearing more than one hat. As a result, I ordered intimation on the Lord Advocate for the Public Interest.

Hearing of 20 April 2006

In the event, the Lord Advocate declined to become involved. There was no opposition to the order sought and no contradictor. It was submitted that the adult would benefit because it would enable the implementation of an action which he would have been advised to do if he had had the capacity. The critical provision here once again is section 53(9) of the Act, a provision of potentially enormous and significant scope. He has no need for the money, and would have been fully entitled to renounce his right to it, securing the passing of the assets in accordance with the wishes of his wife and himself, and enabling the conclusion of the administration of her estate and the management of his, and to enable the legitimate limitation of his estate since there would be no financial benefit to him in increasing it.

In any event, the fact that others will benefit from a proposed intervention is neither prohibited by the Act nor a reason for not granting it. There is no test of "primary" or "secondary" benefit. The test is whether the intervention will benefit the adult, and that that could not reasonably be achieved without the intervention. His right to claim subsists until extinguished by the long negative prescription. The taking of an action which would have the effect of unlocking a deadlocked estate was regarded as appropriate under the previous law.

It was significant that in this case there was no suggestion that by limiting the extent of the adult's estate, the responsibility for paying for his care would fall on the local authority. That happens when the adult's assets fall below a certain limit, but the value of the adult's existing estate was such that prudent investment was having the effect of increasing it, not diminishing it, and there was therefore little likelihood of it falling below the level when costs fall to be paid by a local authority on a means tested basis.

As to conflict of interest, all of the family members were involved, and none was excluded from succession. Albeit they were all wearing more than one hat, that is not unusual in a small, close family relationship, and albeit the applicants were directly to benefit from the proposal, the existence of that situation ought not to prevent the application from being granted. I was also advised that current practice in advising on the wording of Powers of Attorney is to include such a power as is sought here.

Conclusion

In these circumstances, I came to the view that it was proper to grant the application brought, and to authorise the applicants to execute a renunciation of the adult's legal rights to a claim on the estate of his late wife. I am satisfied that he will benefit from that, and that it cannot be achieved at all unless this step is authorised. To do so is plainly in accordance with his previously expressed wishes. Benefit can accrue even though the adult may now have lost the capacity to appreciate or understand that benefit. The proposed step would be legitimate if the adult had the capacity to take it himself, and in all of these circumstances, I was satisfied that it should be authorised.