LMS, Re (settlement of property into a trust)

LMS, Re (settlement of property into a trust)

The court authorised the settlement of LMS’s inheritance into a disabled person’s trust on the basis that the significant operative purpose is to better effect the intention of LMS’s grandfather that she benefit financially, not to secure means-tested benefits. The arrangement does not offend public policy, and the court’s intention is not to deprive LMS of capital for benefit purposes.

Parties
Applicant: FSS; First Respondent: LMS; Second Respondent: MS; Third Respondent: TW; Fourth Respondent: JR; Fifth Respondent: RR
Jurisdiction
England and Wales
Judgment Date
11 September 2020
Procedural Posture
Property and Affairs (court of Protection) / Judgment
Outcome
Application allowed
Legal Topics
Disabled Person's Trust, Means Tested Benefits, Best Interests Decision, Deprivation of Capital, Lasting Power of Attorney
Mental Capacity Law Trusts and Estates Disabled Person's Trust Means Tested Benefits Best Interests Decision Deprivation of Capital Lasting Power of Attorney

Case Brief

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Parties

FSS

Applicant

LMS

First Respondent

MS

Second Respondent

TW

Third Respondent

JR

Fourth Respondent

RR

Fifth Respondent

Procedural Posture

Property and Affairs (court of Protection) / Judgment

Legal Issues

  1. 1 Whether the court should authorise the settlement of LMS's inheritance into a disabled person's trust under the Mental Capacity Act 2005
  2. 2 Whether the proposed deed would amount to a deprivation of capital for means-tested benefits purposes
  3. 3 Whether the arrangement is in LMS's best interests

Ratio Decidendi

The court authorised the settlement of LMS’s inheritance into a disabled person’s trust on the basis that the significant operative purpose is to better effect the intention of LMS’s grandfather that she benefit financially, not to secure means-tested benefits. The arrangement does not offend public policy, and the court’s intention is not to deprive LMS of capital for benefit purposes.

Court Disposition

Application allowed

Orders

  • The proposed deed is authorised subject to amendments: (1) vesting power of removing and appointing trustees in LMS (or the Court of Protection if she lacks capacity); (2) amending default trusts to provide for appointment by LMS’s will and, failing that, for her children or grandfather’s other grandchildren.
  • The Official Solicitor’s proposed wording on costs to be included in the order and deed.