Decision making in respect of property and affairs

The Court of Protection (the court) is permitted to make decisions in respect of the property and affairs of a protected person (P) by section 16 of the Mental Capacity Act 2005 (MCA 2005). Common applications include applications to buy, sell and lease property, applications to make gifts and settle property and applications authorising the deputy to sign a statutory Will on behalf of P.

When making decisions in respect of P’s property and affairs, the decision maker must first consider the principles set out in MCA 2005, s 1, namely:

  1. P must be assumed to have capacity unless it is established that P lacks capacity

  2. P is not to be treated as unable to make a decision unless all practicable steps to help P to do so have been taken without success

  3. P is not to be treated as unable to make a decision merely because P makes an unwise decision

  4. an act done, or decision made, under MCA 2005 for or on behalf of P must be done, or made, in P’s best interests

  5. before

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High Court judgment demonstrates usefulness of section 423 of the Insolvency Act 1986 in Schedule 1 claims (Re P (A Child) (Financial Provision))

Family analysis: In this Schedule 1 case the mother received, for her son’s benefit: a housing fund of nearly £1m (the property to be held on trust); child maintenance (including ‘HECSA’/carer’s allowance) until completion of his first degree; and lump sums in respect of his capital needs and her own substantial liabilities (chiefly relating to her unpaid legal fees). The father (whose resources could be measured in the ‘tens of millions of pounds’) had sought to prejudice the mother’s claims via transferring his valuable shares to family members, who then transferred the same into a trust structure (settled under Czech law). A further onwards transfer was then made of the trust’s assets into a Liechtenstein foundation. Inferences were drawn by the court in respect of the level of the father’s wealth, and specifically as to the value of the transferred shares. Detailed findings were made against him in respect of the identified transactions, which had been the focus of the mother’s section 423 application. Although a section 423(2) order was not actually made, the application was adjourned pending the father’s compliance with the award, with security in the sum of £600,000 also ordered, alongside a continuation of the freezing orders made earlier in the proceedings. David Wilkinson, solicitor at Slater Heelis, considers the issues.

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