Case Summary – Gifts from Personal Injury Awards

There have been two recent cases in the Court of Protection involving gifting from personal injury awards.

In the first case, X, Y and Z (by the children’s guardian, a local authority), at the Court of Protection hearing for financial issues joined with the family court which was dealing with the issue of where the children should live.

The children’s mother had been subject to domestic violence by their father which had resulted in a divorce and the father serving a jail sentence. The mother had then been involved in a car accident in which two occupants of the car were killed.  The mother was left with very serious physical and mental injuries.

The Court of Protection was being asked to authorise the use of some of the mother’s money to pay for a carer to look after the children.  The children had originally lived with the mother with care brought in but this was not sustainable because of the mother’s unpredictable moods and the effect this was having on the children.

The Court considered the position carefully, especially because the mother’s money was likely to run out.  On balance, the Court felt that some of the funds ought to be used to pay for the care of the children as proposed.  However, safeguards were put in place.

In another case, AK, the parents of an injured boy with a short life expectancy wanted to build a property in Pakistan.  It was important for cultural reasons for AK to go to Pakistan and the climate benefited his health.  The Court was conscious that although AK was spending less than his periodic payment at the moment, if his parents were no longer able to care for him the situation could be quite different.

The Court looked carefully at the different ways in which the objective could be achieved and ultimately decided to lend the parents £150,000 on an interest free basis.  The Court provided that, where there was surplus income in any given year, a gift could be made to the parents equal to the amount they would have to pay back under the loan for that year.

SFE members can see a full discussion of these cases in Lynne Bradey’s May column for Solicitors for the Elderly at www.solicitorsfortheelderly.co.uk