One of our recent blogs looked at the circumstances in which one may challenge lifetime gifts made by a vulnerable individual in the Court of Protection. Another subject linked to this article is the topic of what happens if a deputy for a protected party makes a gift to him/herself, and in those circumstances, who can challenge that gift and how.
Below, we have provided some guidance on this subject.
What happens if a deputy for a protected party makes a gift to themself and who can challenge that gift and how?
A deputy appointed to manage a protected person’s property and financial affairs are able to make certain limited gifts on behalf of that person providing they fall within the parameters set out in statute and also in the deputyship order. There will sometimes be conflicting views between those close to the protected party as to whether a gift made by him/her could ever be in their best interests and the first port of call when considering whether to challenge a gift is section 12 of the Mental Capacity Act 2005. Under the legislation, a gift can be made on behalf of without the Court of Protection’s approval from the protected party funds to a charity which he would have been expected to make or, to a person related or connected to a protected party on customary occasions (i.e. birthdays, religious festivals, weddings) provided the value of the gift is “reasonable in all circumstances”.
It is common for deputies to be related to a protected party, except in circumstances where a professional deputy is appointed, and therefore making a gift to himself/herself is possible within the above parameters. The deputy must of course be totally satisfied that the gift is reasonable in the circumstances and if there is likely to be any doubt, authority should be obtained from the Court of Protection failing which the deputy could be ordered to repay it, or challenged by another relative or the Office of the Public Guardian (OPG).
If the gift is seen to be unreasonable or excessive, the OPG may raise comments when the annual report is lodged. The OPG may go further and raise concerns with the Court of Protection which may lead to the Official Solicitor being appointed to represent a protected party in formal proceedings. Via his/her solicitor, the protected party may challenge and set aside that gift on the basis it is unreasonable in amount or that paying it in the first place constituted an abuse of the deputy’s authority. Any gift found to be unreasonable or transferred in a clear abuse of position will be set aside and the deputy shall be held accountable for its value.
Any interested party (usually a relative or close friend of the protected party) may raise concerns over a deputy’s handling of the protected party’s assets with either the OPG or with the Court of Protection. If the Court of Protection finds merit in the claim they will then provide directions to investigate any abuse of position and as above, the Official Solicitor will likely be appointed to assist.
How can Nelsons help
If you require any advice in relation to the subjects discussed in this article, please do not hesitate to contact Stuart or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.Contact us