A recent Court of Protection decision has provided additional guidance on the circumstances in which a person holding a Power of Attorney can make gifts to themselves.
In TH v JH and others,  EWCOP 13, the Court of Protection approved £72,820.79 of the £99,579.89 an attorney paid himself from his father’s funds. The Court approved the payments after finding they were made in the “best interests” of the father.
TH and JH are the children of HH. HH suffers from Alzheimer’s and needs assistance with all aspects of his daily life. In 2013, TH registered an Enduring Power of Attorney (“EPA”) for his father’s property and affairs. This meant TH could make decisions for his father’s bank accounts, investments and pensions. Whilst attorneys have a lot of power, they must act in the best interests of the person who gave them the power of attorney (referred to as the “donor”).
It appears that the case was prompted by an Office of the Public Guardian (“OPG”) investigation into TH’s spending of HH’s money. Following its investigation, the OPG requested that TH make an application to the Court for retroactive approval of gifts of money he had paid himself between 2011 and 2017.
These payments totalled £99,576.89 and apparently included the following payments made between 2013 and 2017:
- £9,000 towards the running of TH’s family home in Ireland, which he had left in order to care for HH;
- roughly £43,600 transferred to TH’s personal account to meet his and his family’s needs such as rent;
- £7,000 in cash withdrawals;
- £5,500 for personal loan repayments; and
- £8,000 in miscellaneous expenditures such as travel expenses and materials for TH’s business as a self-employed artist.
TH suggested these were a mix of gifts and payments he made to himself as remuneration for the care he was providing his father. His estranged brother JH opposed the application and argued that only £30,000 of the total amount should be approved by the Court.
The Court’s Analysis
TH had been his father’s full-time live-in carer since 2014 and the Court of Protection recognised that it would have been more expensive to hire a professional full-time carer over the same number of years. The evidence was that TH took good care of his father. The Court also noted that HH and his wife had always been very generous with their money when it came to their sons.
The Court held that the test for approval of gifts is the “best interests test”. This is an objective test which should take into account all relevant circumstances including what the person’s wishes are or were, the values that would likely influence their decision, and the views of interested parties.
The Court referred to OPG guidance on payments made to a family member who is acting as a full-time care provider. The factors to consider include:
whether the payment is reasonably required;
whether it was affordable; and
whether the care is actually being provided.
In reaching its final decision, the Court appears to have been particularly concerned with whether the payments could be justified as being for HH’s care. Referring to payments made between 2015 and 2017, the Judge was “satisfied that the sums claimed represent the cost of TH providing care during this period. There is no doubt the care was required to meet HH’s needs and that it was of good standard. […] In all the circumstances, I do consider these payments were made in HH’s best interest”.
The Final Decision
The Court of Protection concluded that some but not all of the payments that TH made to himself could be justified. It approved £72,820.79. The parties agreed that an independent professional (also called a “panel deputy”) should be appointed to take care of HH’s finances in moving forward.
The Court recognised it did not have authority to order TH to repay the balance to his father and mentioned that further court action would be a waste of money in any event considering TH did not have the funds to repay HH. The Judge did however suggest a creative solution, which was that the unapproved sums should be deducted from TH’s inheritance.
This case illustrates how difficult it can be for full-time carers and concerned family members to ensure a loved one is properly cared for. If you are concerned that a friend or family member is being taken advantage of, or if you are an attorney looking for advice on making gifts, please contact Nicholas Choiniere at 0113 336 3349 or by email at firstname.lastname@example.org.
*Names have been omitted to protect the anonymity of the protected party and members of their family.
Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.