F v R [2023] WTLR 137

Analysis

R had a lifelong significant disability and lacked capacity. His estate at the time of the application comprised income from state benefits. The total benefit income was £60,293.48 of which £52,381.60 was means-tested. R’s mother had a cousin, T, who passed away leaving their residuary estate to R absolutely. The bequest was in the region of £400,000-£600,000 which would have reduced R’s means-tested benefit entitlement to nil.

Proceedings were brought by F for approval of a deed of settlement which would result in the sum instead being left on a disabled person’s trust for the benefit of R. R was joined as a party and the Official Solicitor appointed to act as his litigation friend.

F made the application on the basis that the deed of settlement would better effect the intentions of T. It had been F’s understanding, when F and T had discussed the possibility of a trust, that T would instruct solicitors to leave any provision for R under a disabled person’s trust. T’s solicitors’ files were disclosed. F’s position was that if there was any possibility that the proposal would protect eligibility for benefits, then that potential outweighed the disadvantage of the trust structure.

The Official Solicitor did not dispute that there would have been a considerable advantage to R if T had placed their residuary estate into a trust, so ensuring that the funds were disregarded for the purposes of means-tested benefits. However, that was not what had occurred. The Official Solicitor’s view was that there was a clear risk that if the proposed settlement was authorised by the court, then the relevant authorities would take the view that the preservation of means-tested benefits was a significant operative purpose behind the creation of the settlement.

Held:

1. (1) The question was what was in the best interests of R, a particular and unique person.
2. (2) The court was not persuaded that the purpose of the application was to give better effect to T’s intentions. It was not accepted that anything in the documents provided from the will file indicated any concern on the part of T regarding the protection of eligibility to benefits.
3. (3) A gift which had the effect of taking a person out of dependence on means-tested benefits was not a ‘waste of time’. The only obstacle in the way of R benefiting as F wished was the rule about entitlement to means-tested benefits. Any difference between a wish to better effect the intention that the applicant asserted, and a wish to protect benefits, was specious.
4. (4) The structure of the proposal had real disadvantages when compared to a deputyship. It would take R’s only capital outside the oversight of the OPG. There would be no security bond as a step of protection in case of default. There was potential for adverse tax consequences if the public authorities did not accept the proposal as being legitimate.
5. (5) The proposed trust had no or insufficient mechanism to ensure that the sums would actually be applied for the benefit of R as opposed to accruing for the ultimate beneficiaries.
6. (6) There was a clear risk that the relevant authorities would nonetheless take the view that preservation of means-tested benefits was a significant operative purpose.
7. (7) The court could not endorse a proposal which purpose was to preserve an eligibility to benefits which Parliament had decided did not exist.

The numbers in square brackets refer to pages in the hearing bundle. JUDGMENT HHJ HILDER: [1] The Court is today concerned with the best interest of R, now in his 30s. He has a life-long, very significant disability. Capacity in this matter is not in issue. A capacity assessment has been filed [20]. The parties …

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