Can the Court of Protection save my means tested benefits after I inherit? The sequel…

You might remember the case of LMS.

In that case, LMS was a 21 year old  who lacked capacity to manage her finances and who received means tested benefits and care.  Her mother applied to the Court of Protection to allow the money her grandfather had left her to be put into a disabled person’s trust instead.  At the time I did comment that even though the Court of Protection allowed the trust to be set up, it wasn't binding on the benefits authorities. 

This issue has come before the Court again in the case of F and R. 

R is in his 30s and has a lifelong significant disability.  He gets means tested benefits and direct payments for care and support which are also means tested.  R’s cousin left a third of his estate to R.  The value of that gift was somewhere between £400,000 and £600,000.  R’s father asked the Court of Protection to allow the money to be put into trust to save R’s means tested benefits and care provision.  The Official Solicitor raised a concern that the authorities would take the view that preserving benefits was a significant operative purpose for the creation of the trust.  That would mean the means testing authorities could decide that R still owned the money and refuse to pay means tested benefits or means tested care funding.  The Judge wasn't convinced that the cousin had actually wanted to leave the money on trust and there was no suggestion on the Will file about the cousin being concerned about R’s means tested benefits. 

The Court felt that the relevant authorities would take the view that preserving means tested benefits was the significant operative purpose of the trust and the Judge said “frankly, I cannot see how any other interpretation can be sustained”.  The Judge also said “the Court cannot endorse a proposal whose purpose is to preserve an eligibility for benefits which Parliament has decided does not exist”.  The Court did not approve the trust. 

Comment

This decision seems to reflect the reality of means testing and someone depriving themselves of assets better than the LMS case.  It is always better for someone who wants to benefit somebody who is reliant on means testing to put an appropriate trust in their Will.  For every person who gets in touch wanting to provide for somebody receiving benefits in their Will, I am contacted by several other people in the difficult situation of being about to receive an inheritance which will affect their means tested benefits.