The Court of Protection has refused a request to make financial arrangements for a young man lacking mental capacity because there was no clear benefit to him of the proposed arrangements.

The young man, now 21, received more than £2 million in damages after medical negligence at the time of his birth resulted in him having cerebral palsy.

He is not capable of making decisions for himself and his solicitor was appointed as his deputy. As a result of his injuries, the man’s life expectancy has been considerably foreshortened and, taking this into account, his deputy applied to the Court for an order to transfer £500,000 of his property to his parents, who are his main carers. The benefit to the man was said to be that it would save Inheritance Tax (IHT) when he died (which he would consider a desirable result) and also that it would better enable his parents to look after him.

The Official Solicitor was unable to support an application to abstract such a large sum from his estate, so a request was made to transfer £325,000 to a flexible trust, achieving substantially the same end.

Although both the young man’s parents supported the application, and his deputy believed it to be in his best interests, the Official Solicitor again contested the proposals, arguing that the gift would provide no direct benefit to the man himself. Whilst it would mitigate the IHT liability on his estate, this would benefit his parents.

In his judgment, the presiding judge held that, whilst the Court is generally sympathetic towards family members who have taken on a caring role and dedicated their lives to looking after an injured relative, ‘it is not the function of the Court to anticipate, ring-fence or maximise any potential inheritance for the benefit of family members on the death of a protected party, because this is not the purpose for which the compensation for personal injury was intended’.

The judge therefore declined to make an order transferring any of the man’s assets into trust or to his parents ‘at this stage in his life’.


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