The Court of Protection is the specialist court that looks after the affairs (both health and financial) of those who cannot manage them themselves, referred to as ‘P’. One of the powers regularly exercised by the Court of Protection is authorising the execution of a will (called a ‘statutory will’) either to replace an existing will or to put a will in place for the first time.
The Court of Protection does not however have unlimited powers and it is not able to authorise the execution of a statutory will for a child, ie someone under the age of 18. This, in all likelihood unusual, problem was explored in the recent case of LCN v CJF and Others.
CJF was born on 2 October 2005. Complications at the time of CJF’s birth meant that he suffered severe neurological disabilities. He needed 24 hour support for all aspects of his care.
He died on 4 December 2018 when he was just 13 years old. At the time the application was made, his life expectancy was very short.
CJF’s biological father denied paternity and was not involved in his life. CJF’s mother looked after him for the early part of his life, but she suffered permanent health issues due to the birth complications and could not continue caring for him. CJF was then looked after by foster carers who were unrelated to him, under a special guardianship order (which is an order appointing a guardian for children who cannot live with their birth parents).
CJF also had a deputy for property and financial affairs. A medical negligence claim meant that CJF received an award in damages from the hospital trust responsible for his birth of £823,943 and staggered periodic payments (which in 2018 were £88,250 per year). The award was held by CJF’s deputy but legally it belonged to CJF, it was not held in any form of trust.
A house was purchased and adapted for CJF’s needs using his funds. He lived there with his special guardians and their two daughters. They treated him as their own child.
In November 2018, CJF’s consultant paediatric surgeon advised that CJF had entered a palliative phase in his care and that his life expectancy was only four to six weeks. This prompted consideration about what would happen on CJF’s death, both to the property that he and his foster family lived and the balance of the award. CJF’s total estate, including his home, was worth around £660,000.
On CJF’s death, under the rules of intestacy, his assets would be divided equally between his mother and father, with nothing passing to those who had become his family.
CJF’s deputy asked the Court of Protection to authorise the execution of a trust under which CJF would benefit for the remainder of his (limited) life. The house would then go to his foster parents and the residue to pass to his mother.
Unsurprisingly CJF had expressed no wishes as to what should happen to his estate after he died. The medical evidence suggested that CJF was unaware that he had an estate that could be passed on. However, he was aware that he was being looked after by people who loved and cared for him and is likely to have been aware that the home he was living in had been adapted to improve his quality of life.
There was common ground between the parties that the settlement should be authorised and the Judge’s own review supported their approach.
The Judge explored the beliefs and values that CJF would have been likely to consider if he were able to do so. Those factors included:
• The financial impact that caring for him had on his special guardians. One of his special guardians was unable to work due to her caring responsibilities and the other took a lower paid job in order to be able to make more time for CJF;
• It was likely that CJF would have wished to provide for those who loved for him and cared for him, including his mother and his special guardians;
• It was likely that CJF would have wanted to benefit his mother because she had cared for him during his early life and suffered ongoing health issues as a result of his birth; and
• CJF would have been unlikely to want his biological father to benefit from the trust, given that he had denied paternity and had not been involved in CJF’s life.
The Judge stated that the most important factor was that CJF’s special guardians and their daughters could remain in the home they had shared with CJF, and so that their daughters could continue attending their local school.
Weighing up the various factors, the Judge concluded that it was in CJF’s best interests for the property to pass to his guardians and the residue to pass to his mother, so he authorised the execution of the trust.
In considering the application, the Judge had to grapple with two particular issues, what about the father and what about inheritance tax?
• What about the father?
The applicant deputy had only found the father’s address shortly before the hearing so the father had not been served. Permission to dispense with service should only be made in exceptional circumstances where there are compelling reasons to do so.
The Judge was satisfied that there was a genuine urgency and the hearing should proceed despite the father not being served. He went so far as to say it would be wrong to delay proceedings given the significant risk that the rules of intestacy would apply to CJF’s estate.
However, he ordered that the father be served with a copy of the order so it was open to him to apply to vary it or set it aside.
• What about inheritance tax?
The applicant proposed that the property should pass to CJF’s foster family free of inheritance tax. That was supported by the foster family and the Official Solicitor but opposed by CJF’s mother. It was clear from their evidence that although the foster family were prepared to pay some of the inheritance tax it would be a struggle for them to do so. The Judge noted that there was no tension between CJF’s wishes and feelings and his best interests. He found that the “magnetic factor” was that, were he able to do so, CJF’s concern would be that the foster family could remain securely in the home that they shared with him. It had been his home for the majority of his life and a home where he had been provided with care and love.
The Judge concluded that the inheritance tax should be borne by the residuary estate.
Part of what makes this case a sad story is that the application was made and heard in the final days of CJF’s life. The Judge acknowledged the pressure that placed on CJF’s mother. It is a timely reminder that it is always better to make such an application sooner, rather than later when everyone is under more pressure.