Court Grants Settlement Of Mentally Disabled Child's Estate

Court Grants Settlement Of Mentally Disabled Child’s Estate

In the case of LCN v KF & Ors [2019] EWCOP, CJF was a 13 year old boy who lacked capacity and required 24 hour care after suffering extensive injuries through negligence at birth. He unfortunately died a few days after this decision. His father was not present in his life. His mother, KF, was 18 years old and suffered severe medical complications at his birth and initially looked after him but he later lived with foster carer, LR, under a Special Guardianship Order. CJF received £824,000 and a periodic payment of £88,000 per year as compensation for his injuries.

LR died before the claim was settled and so her daughter, EH, and her husband, AH, took over CJF’s care and guardianship. They purchased and adapted a property where he lived with EH and AH and their two daughters.

CJF's Deputy made an application to the Court of Protection (the “Court”) under section 18(1)(h) of the Mental Capacity Act 2005 for the settlement of his property on revocable trust for himself during his lifetime and then for his property to pass to EH and AH as his foster carers and the residue of his estate to pass to his mother KF.

The Court found that CJF had not any expressed wishes and feelings as he was unaware that he had an estate. However, the beliefs and values likely to have influenced his decision would be to provide for those who loved and cared for him; including KF, EH and AH, and their two daughters.

EH and AH were willing to pay the Inheritance Tax (IHT) on CJF’s estate by instalments but this would be difficult for them to afford as EH could not work due to her caring responsibilities and AH took a lower paid job to make time for his family and CJF. They also refused care payments they were entitled to from CJF's estate; which benefited his estate by £240,000.

The Court considered the statutory will authorities on best interests and the element of substituted judgment and found the magnetic factor to be that CJF would have wanted his foster carers and their daughters to remain in their home. Half of CJF's property would be inherited by his father, who was not involved in his life, if it was not put into a settlement and was instead distributed according to the intestacy rules.

EH and AH received the property effectively free of IHT as the Court found it would not be in CJF’s best interests for there to be a risk to the family home. The rest of his estate passed subject to IHT to his mother, KF. His father did not inherit at all on the basis that this would not be in CJF’s best interests as he had never known him but the Court ordered that he should be served with the order after the hearing and could apply to the Court for the order to be set aside or varied.

This is an interesting case that looks at what is in the best interests of a person who lacks capacity, and the decision avoids the unfairness of the result if the intestacy rules were followed; which would have meant that CJF’s father benefited. KF, LR and later EH and AH had been involved in CJF’s care throughout his life and the Court found that he would have wanted them to be provided for if he had been able to make the decision himself. CJF’s Deputy was sensible to apply to the Court for a decision, especially as they have a duty to act in the best interests of the person who lacks capacity. 

To discuss any of the issues raised above or any aspect of the responsibilities and powers of a Deputy, please contact a member of the Private Client team on 01384 410410.