Gift Giving by someone mentally incapable – Part 8
There has been a new case – known as DP, which was decided on 11 February 2014. In the case, DP (the person with dementia) had distant family; she was widowed and had no children. She moved into her house from London in 2005, where she met JM, who became her gardener.
In August 2011 she made her last Will, giving 10% of the proceeds of sale of the house to Brookwood Cemetery and 10% to the Russian Orthodox Church (as she had been a member of the Russian Orthodox Church for decades). The rest of the proceeds of sale and the remainder of her estate she left to JM! It was later argued that she may not have had capacity to make this Will.
Then in October 2011, she made an LPA appointing JM to be her sole attorney and got friends to act as the two certificate providers to say that she understood it and was not acting under undue influence.
JM asked the Financial Ombudsman to investigate the advice of her financial advisor and as a result of this investigation, she was awarded £38,606.32, however Aviva were worried about financial abuse, so effectively froze the account. JM sold the house, as the Aviva account was frozen and deposited the proceeds into a bank account in his own name, but when he realised he was being investigated, he put the funds into DP’s name.
JM then proceeded to make a series of gifts to himself, which included £38,000, additionally he was unable to explain a bankers draft for £1,500 or cashpoint withdrawals for £8,520. He claimed he had spent money on home improvements, but was unable to produce receipts. He had claimed for himself £20 per day salary for “house clearance and rubbish removal” for a year and £20 per week for gardening, also for a year. Additionally he withdrew £55 per week, to fund his wife’s motability car and funded the petrol with payment of £10 every 2-3 days.
This issue about these “salaries”, is that DP had not completed the section of the LPA regarding paying her attorney and as such, he was not entitled to payment for his services. If he had wanted to receive a salary for non attorney work, ie the gardening & house clearance, then he should have applied to the Court of Protection, who may well have granted it, if it had been reasonable, the gardening probably was, the house clearance probably wasn’t, but it would be dependant on the exact details of the case and this was never put before the Court to decide, so we will never know!
The Court investigated and he wanted to keep the motabiltiy payments going, as without them he claimed he would not be able to visit. The Court is never persuaded by this kind of argument. His wife had forfeited the £55 p/w of her motabilty payment for the car and it was not the role of DP to compensate her for this financial loss, nor should DP fund the petrol.
JM had taken care of her and had made sure that she was in a care home, that the fees were paid and that she was receiving a personal allowance. However the Court decided that had had contravened his authority and had acted in a way that was not in DP’s best interests, so revoked the LPA and asked for a Panel Deputy to be appointed instead.
The Court went on to say that as the house had had to be sold, one of the first tasks for the Panel Deputy to do would be to apply to the Court of Protection for a statutory Will to make sure that Brookwood Cemetery and the Russian Orthodox Church still benefited from her estate in due course.