Spending spree

Senior Judge Lush recently considered an application in the Court of Protection by lay deputies MJ and JM to retrospectively approve money that they had given away on GM’s behalf since the start of their deputyship (unreported, case 11843118). At the time of the application, MJ and JM did not have legal representation and applied on the Office of the Public Guardian’s (OPG) suggestion.

SJ Lush heard that GM’s assets originally totalled about £498,000, of which about £316,000 represented funds that GM had inherited from the estate of her late daughter.

From that £498,000, MJ and JM had gifted to various charities, given cash gifts to close ones, and bought birthday and Christmas presents for family and friends. They both got significant cash and chattels.

In addition, they had also paid their ‘expenses’ from GM’s funds. These amounted to £46,553.14 and comprised a car and computer each.

This reduced GM’s assets by £277,992.64, leaving her (after nursing fees that had been paid) £177,230.96.

At the time of the hearing no application had been made for a statutory will for GM, despite SJ Lush previously recommending that MJ and JM do so. Therefore, GM was intestate. On that basis, MJ and JM would not be beneficiaries of her estate, being GM’s late husband’s great niece and niece, respectively.

MJ and JM justified their gifts as follows:

• They had acted as they thought they could under the deputyship order.

• The steps they had taken would have been approved by GM if possible and certainly her daughter.

• They were the only ones who visited her.

• GM was 92 and was left “approximately £200,000”, which they believed to be “adequate”.

In response, the OPG’s report stated it could not recommend that the gifts to MJ and JM’s immediate family, the gifts to MJ or JM or the ‘expenses’ claimed be approved retrospectively. It did not, however, wish to seek any directions from the court in respect of the gifts made to charities. Furthermore, it felt that a gift of £2,500 to a friend of GM’s daughter and her immediate family should be approved.

The OPG also recommended that MJ and JM should be removed as deputies and replaced by a panel deputy. At the hearing, MJ and JM conceded that:

• They had signed a deputy’s declaration that contained a number of undertakings.

• They had not read the Mental Capacity Act 2005 Code of Practice.

• They had not discussed any of their gift-making proposals with GM.

• They had no evidence of the extent to which GM had given them gifts in the past.

• They had invested the remainder of the funds in their own names but had now transferred them back on legal advice.

SJ Lush ruled GM lacked capacity and disallowed all gifts to MJ and JM and their families over the sum that they had authority to make. He also refused to ratify the deputy’s expenses and agreed with the OPG that these constituted additional unauthorised gifts.

He did, however, approve the gifts to charity and the £2,500 gift to GM’s daughter’s friend, in line with the OPG’s recommendation.

SJ Lush did not accept that the gifts were in GM’s best interests and stated that they were completely out of character.

He said MJ and JM’s ignorance of their duties was no excuse and, while they were GM’s only visitors, that did not give them “a licence to loot”. He had “no hesitation” in removing them as deputies.

Matthew Evans is a partner at Hugh James

He writes the regular vulnerable clients comment in Private Client Adviser