When a deputy purchases a property for a patient, should the purchase be in the name of the deputy or in the name of the patient?
The court of protection are raising objections to deputies buying a property in their names with a normal trustee restriction, and a separate bare trust declaration. Have other members had similar objections?
Likewise, would stock exchange investments normally be in the name of the patient or the deputy?
Simon Northcott
I believe the official guidance on this has changed over the years. My understanding is that if the Patient is an adult then the transfer should be in the name of the patient, (and either signed by the Patient! or by the Deputy if the Patient cannot sign… ie 'Patient acting by … Deputy). Where the Patient is a minor, then the transfer should be in the name of two trustees with an appropriate declaration of trust.
Haroon Rashid
I Will Solicitors Ltd
I have always bought the property in the name of the client. The contract is in the name of the client with wording such as ‘acting by his deputy Mr X’ added. Anyone else remember the days when the COP had to approve the contract and the transfer and so on?
Mrs J E Bennell
RLK SOLICITORS LTD
To my mind, good practice dictates that P’s assets should be held in their name, rather than transferred to, or purchased in, the name of the deputy.
By keeping them clearly separate, this avoids the risk of inadvertently mixing the assets (most likely if both the deputy and P have shares in the same company and dividends are mandated to the deputy’s bank account).
It also reduces the risk of allegations of financial abuse and challenges from beneficiaries as to the composition of the estate upon the death of either P or the deputy.
As the media plays up those occasions where financial abuse occurs, it is better to keep assets clearly segregated than to create the potential seeds for suspicion.
Paul Saunders
Over the last 20 years I have had loads of grief buying in the name of deputy / trustees (eg HMRC enquiry which was very time consuming). I have learnt the hard way. Where P is an adult always buy in P’s name alone. Not sure of the position if P is minor.
As an aside if property is in Scotland you need a Sheriff Court Certificate formally recognising the English COP order and purchase is made in P’s name using the Certificate to register the transaction at the Scottish Land Registry
Vincent Oakley
On a related point, I wonder if I might have comments on the likelihood of the court approving a proposal if application is made providing adequate supporting information?
In my case, the deputy is one of two daughters of the patient, the other having died last year leaving an infant child which the deputy, herself a divorcee with two minor children, has taken on as guardian. Deputy is a working woman in her forties, does not have a great deal of money - not enough to buy a house or put a worthwhile deposit on one on which she could then have a mortgage that she could service.
Mother (the patient), an elderly lady in her 80’s, resides with her sister (in her 90s) who is financially able to look after the patient. It’s a permanent arrangement or at least, set for the foreseeable future. If the caring sister were to die, there would be adequate provision for the patient under her Will.
The patient has about £600,000 on deposit, doing very little, itself a worry and unsatisfactory having been like that since the deputy was appointed 3-4 years ago. The deputy knows that she should invest etc.
The deputy asks: can she buy a property with the patient’s money, in the patient’s name for the use of the deputy at a market rent, in which to reside with the patient’s grandchildren?
It makes sense to do this on most if not all grounds. Payment of rent by the deputy has to be made to a third party otherwise. The cash will depreciate if left as it is and probably do no better in investments than in bricks and mortar. The acquisition of real property for this purpose would seem a not unwise investment decision in the circumstances and also a good idea for the family unit as a whole: after all, the patient’s estate (she is probably intestate) will pass to the deputy and her grandchild (son of the deceased child), all of whom would therefore benefit from this arrangement in the short and long term.
The tax consequences are no worse than any other arrangement. And maybe, the patient spending little if anything on herself, it would be possible for the deputy to be permitted to reside at a reduced rent and the gift element be covered by normal expenditure out of income.
Apologies for the length of this question. Comments would be gratefully received. Maybe the answer is obvious but I haven’t met the question before so forbearance would also be appreciated.
David Martin
Kidd Rapinet
I don’t think the answer is obvious and shared experiences in these scenarios can be very insightful. I have something similar for which I am currently considering preparing an application to the CoP. The basic premise must be based on s1 of the Mental Capacity Act and the ‘best interests’ test. If this is satisfied, I cannot see why the CoP would refuse and for this reason the application must be very thorough. The Court will of course want to know of any potential pitfalls. The obvious one that occurs is what if the ‘tenant’/Deputy stops paying rent? How would this be ‘policed’ but I don’t think that is insurmountable. There are also obvious conflicts of interest. It occurs to me that having an independent or professional deputy in these circumstances means the application may be more likely to be granted. I am sorry I could not be of more direct help but good luck - It would be useful to know the outcome!
Haroon Rashid
I Will Solicitors Ltd
I am very grateful to you for your contribution. It orders things more for me. I’ll let you know if I can persuade the client to concentrate on making the application. Would the costs of the application be for the patient even if unsuccessful, do you think?
David Martin
Kidd Rapinet
I can’t imagine that the costs would not come from the Patient’s estate unless the application was badly presented, or completely without merit.
Haroon Rashid
I Will Solicitors Ltd