Gift Giving by someone mentally incapable – Part 3
Having discussed the Re Buckley case in the first blog and Re GM in the second I will now go through the details of the Joan Treadwell case:
This is a classic story of a family disagreement between step children of a later marriage. Joan married and had five children, then married her last husband (Bill) aged 58, by the time of the case, some of her children had their own children and grandchildren. Bill had two daughters. Joan appointed Bill to be attorney and on registration Colin (Joan’s son) objected, but it was registered anyway. After Bill’s death, Colin was appointed as Joan’s receiver and then with the Mental Capacity Act 2005, became her deputy. It appears from the matter that the two sides of the family did not get on, with Colin, claiming his mother was “entirely under [Bill’s] thumb”.
The terms of Joan’s Will left each of her children a modest legacy of £1,000, with the residuary estate divided equally between her step daughters. Much of her estate consisted of the half share of the family home, which Bill and his first wife had purchased, therefore the principle behind of the terms of her Will were that as her estate had emanated from Bill, it was to be returned to his family. Colin was not happy with this and issued proceedings for a statutory Will, the various parties agreed terms and the Court approved of the negotiated settlement and the legacies to Joan’s children were increased to £5,000. Colin was clearly still not happy. Joan’s estate at the time of the statutory Will was IRO£150,000 and she had annual income of IRO£10,000. Joan became eligible for NHS Continuing Care funding and received a refund of £47,435.
With the refund received and the cost of care funding resolved, the gifting commenced and Colin, as deputy he made gifts over a three year period of £34,800, £9,450 and £15,125, a grand total of £59,375. The gifts were mostly birthday and Christmas presents, however there were two £9,000 gifts to great grandchildren’s trust funds, a graduation gift of £2,500 (given four years after graduation) and a housewarming gift of £2,500. The gifts were all to members of Joan’s family, except for one gift of £125 to the staff of her care home. Colin was advised by the OPG to apply for retrospective approval of the gifts and made an application. Joan died before the hearing, but unfortunately for Colin the Court retained jurisdiction over the discharge of security bond and as the Public Guardian had been involved just prior to her death, the OPG made an application in respect of this case to ask the Court to consider calling in the security bond. After Joan’s death however, the Court no longer retained jurisdiction to approve the gifts.
The Court considered of magnetic importance the terms of her Will, which she had executed when she retained capacity. The Will gave the bulk of her estate to her step daughters. The Court accepted that Joan’s needs were being met with NHS Continuing Care funding, but that did not mean all her money could be given away. As the funds spent on care originated from Bill’s money, the refund the Court decided was a return of that capital.
Again there was a careful and considered judgement as to what was reasonable in the circumstances of Joan’s estate and made the decision that £15,000 would have been authorized across the three years, as the OPG suggested, which consisted of £1,000 each to her five children per year, for three years.
It was accepted by the Court that the gifts were on customary occasions but the values involved were excessive and in accordance with Mental Capacity Act “unreasonable having regard to all the circumstances and, in particular, the size of the donor’s estate”. The Court helpfully provided more guidance of gift giving.
The Court’s decision was to call in the bond for the excessive gifting and indicated that Colin “was interfering with the succession rights under her Will by redirecting his stepsisters’ inheritance in favour of his own family by making excessive gifts to them”. The Court went on to say that “When a deputy or attorney exceeds their authority, or behaves in a way that is not in the best interests of a person who lacks capacity, they forfeit any right to confidentiality and there is no good reason why their identity and conduct should not be made public” and therefore unusually this case has not been anonymised, not forgetting of course that Joan is no longer with us and therefore Data Protection Act is longer relevant.