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7.84The Court of Protection has the power under MCA 2005 s18 to authorise the execution of a will (or a codicil) on behalf of a person who lacks the relevant capacity, and also to authorise gifts on behalf of P that fall outside the very limited scope to gift that is enjoyed by deputies and attorneys alike. These applications raise particular issues which fall outside the scope of this book to discuss fully.
1For more detail, readers are referred to Ashton et al, Court of Protection Practice 2016 Jordans, chapter 5, and D Lush and D Rees, consultant editors, Heywood & Massey: Court of Protection Practice (looseleaf), Sweet & Maxwell, chapters A20 (wills) and A21 (settlements and gifts). What follows is a summary of the key points that arise.
7.85In each case the applicant should obtain specific medical evidence as to P’s capacity in relation to the decision that the court will be invited to make. There are different tests for each decision.
1)In
A, B and C v X and Z,
2[2012] EWHC 2400 (COP), [2013] COPLR 1. Hedley J held that the test of testamentary capacity before the Court of Protection is the common law test formulated in
Banks v Goodfellow,
3(1870) LR 5 QB 549, [1861–1873] All ER 47. ie that:
It is essential … that a testator shall understand the nature of the act [of making a will] and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect, and … that no disorder of mind shall poison their affections, pervert his sense of right, or prevent the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if his mind had been sound, would not have been made.
Note that the test in
Banks v Goodfellow differs in some ways from the approach adopted under MCA 2005 ss2–3 (see further paras 3.33–3.64), in particular because it does not allow the reliance on supported decision making that applies to all other decisions under the MCA 2005.
4See for further discussion Alex Ruck Keene and Annabel Lee, ‘Testamentary capacity’ [2013] Eld LJ 272. It may well be that in due course there will be a case in which this question is revisited before the Court of Protection.
2)The test for the capacity to make a gift is – again – derived from the common law, this time from the test in
Re Beaney.
5[1978] 1 WLR 770; see also Re P (capacity to tithe inheritance) [2014] EWHC B14 (COP). The essence of this test is that it is calibrated to the circumstances of the gift, in particular the size of the gift in question in relation to the donor’s assets.
7.86The application for the court to approve a statutory will or gift is subject to the procedures outlined in PD 9F. In essence, it proceeds in the same fashion as outlined above for the basic application, with the addition of a detailed witness statement on the part of the applicant setting out:
•proposed draft will (for an application to approve a will) or details of the gift(s) proposed;
•details of previous wills (if applicable);
•schedule of capital;
•schedule of income;
•schedule of expenditure;
•family tree;
•schedule showing impact of inheritance tax and distribution of estate with and without proposed will or gift.
7.87The applicant’s witness statement needs to explain the reasoning behind the proposals and why it is in the best interests of P.
7.88The case of
Re P 6[2010] Ch 33, [2009] EWHC 163 (COP). sets out in some detail the relevant jurisprudence and the tests that will be applied by the court in deciding if a statutory will should be approved. Further helpful comments can also be found in
Re Peter Jones.
7[2014] EWCOP 59.7.89Careful consideration needs to be given to ensuring that the correct parties are identified and served as respondents in this type of application. If a person is named as a residuary beneficiary in an existing will of P they will need to be named as a respondent in any application to approve a statutory will. A pecuniary or specific legatee under P’s will, whose entitlement would be unchanged by the proposed will, can be named as a person to be notified. If P is intestate (ie they have never made any testamentary provision) then the deputy will need to ascertain their family tree to establish who would inherit from P under the Intestacy Rules set out in the Administration of Estates Act 1925 ss46–47. Anyone who would inherit under P’s intestacy must be notified as a respondent in any application to approve a statutory will.
8Re D [2016] EWCOP 35, [2016] COPLR 432.7.90Deputies have a very limited ability to make gifts on behalf of P. The standard wording of a deputy order gives the power to make gifts of ‘a seasonal and customary nature’ (see appendix D below). The case of
Re GM9[2013] COPLR 290. addressed the scope of a deputy’s powers to make gifts from P’s assets and Senior Judge Lush took the opportunity to provide some guidance on this topic. Having noted that the deputyship order permitted the deputies to make gifts ‘on customary occasions to persons who are related to or connected with them, provided that the value of each such gift is not unreasonable having regard to all the circumstances and, in particular, the size of their estate’ and that ‘a customary occasion’ is defined in MCA 2005 s12(3) as ‘an anniversary of a birth, a marriage or a civil partnership, or any other occasion on which presents are customarily given within families or among friends or associates’ and also that ‘the value of the gift must be ‘not unreasonable’ (s12(2)). Senior Judge Lush set out very clearly the approach to be followed in determining what is reasonable in a given case:
First, regard must be had to the totality of P’s current and anticipated income and capital, expenditure and debts.
Second, consideration must be given to P’s best interests, including the following factors:
•the extent to which P was in the habit of making gifts or loans of a particular size or nature before the onset of incapacity;
•P’s anticipated life expectancy;
•the possibility that P may require residential or nursing care and the projected cost of such care;
•whether P is in receipt of aftercare pursuant to section 117 of the Mental Health Act 1983 or NHS Continuing Healthcare;
•the extent to which any gifts may interfere with the devolution of P’s estate under their or their will or intestacy; and
•the impact of Inheritance Tax on P’s death.
Third, any gift that is not de minimis, must be approved in advance by the Court of Protection. A de minimis gift is to be construed as follows:
‘covering the annual IHT exemption of £3,000 and the annual small gifts exemption of £250 per person, up to a maximum of, say, ten people in the following circumstances:
(a) where P has a life expectancy of less than five years;
(b) their estate exceeds the nil rate band for Inheritance Tax (‘IHT’) purposes, currently £325,000;
(c) the gifts are affordable having regard to P’s care costs and will not adversely affect P’s standard of care and quality of life, and
(d) there is no evidence that P would be opposed to gifts of this magnitude being made on their behalf.’
7.91Bearing this very clear guidance in mind, if a deputy thinks that:
a)a more significant gift should be made on behalf of P;
b)that to do so would be in P’s best interests; and
c)the gift is affordable in P’s circumstances;
the deputy must apply to the court for approval before the gift is made.
7.92In cases concerning the approval of a will or substantial gifting, P will usually be joined to proceedings as a party, and be represented by the Official Solicitor.