Deputyships –v- Trusts – A matter for the Court to decide
George Ide’s private client team was involved in a recent Court of Protection case that clarifies the law concerning how best to protect the interests of an adult whose lack of mental capacity prevents them from managing their own affairs.
In this particular case, our client received a personal injury settlement after an accident in which he sustained a serious head injury that left him without capacity to manage his financial affairs. As a result a Deputy had been appointed by the Court of Protection. However, upon settlement of the claim the Judge queried whether the Deputy should remain so appointed, or whether the client’s compensation would be best managed by a personal injury trust.
The Judge ordered an application be made in the Court of Protection for consideration of this point.
The Court of Protection Judge questioned an earlier case in 2011 whereby another Judge had ruled that where a client lacked capacity to manage his financial affairs and where he were to receive an award of compensation, that a Deputyship would always be the appropriate mechanism of managing the clients affairs in the future, as opposed to a personal injury trust.
In our client’s case the Judge did not agree with this decision and ordered us to conduct specific research into the overall pros and cons of managing his affairs through Deputyship compared with setting up a trust. We were asked to consider the various powers a Deputy or trustees would have in managing his affairs and how much each option would cost, as well as the full implication of irrevocability: a Deputyship can be brought to an end once a person regains capacity whereas the personal injury trust proposed in our client’s case was irrevocable – he would never have full control of his compensation award in future, even if he regained mental capacity.
In our client’s case, the Judge decided that Deputyship would indeed best serve our client’s best interests. As a result of this case, the Judge gave new interpretation to the earlier case when deciding upon which mechanism is most appropriate. The presumption that a Deputyship would always be approved by the Court is no longer the case.
The George Ide team is experienced in all aspects of Court of Protection, trusts and deputyship work. If you need our advice and support, contact our approachable team on 01243 786668 for help.General, George Ide, Investment, News, Personal Injury Blog, Private Client