Guidance: Deprivation of Assets; Disclosing Incapacitated Person’s Wills

Wills and probate solicitors need to ensure they avoid any risk of unwittingly assisting a client’s deliberate deprivation of assets. Recognising the risks, the Law Society has issued a Practice Note for private client practitioners, Making gifts of assets. The Society has also released a separate PN on Access and disclosure of an incapacitated person’s will which is particularly relevant to practitioners who stores wills on behalf of clients.

Gifts of assets
As care home fees have increased and become a major issue for the older generation who want to protect their assets, clients have increasingly sought to transfer assets at a price significantly undervalue, or to gift them outright to family members. For many, however, such a course of action is not a legitimate route to avoid care home fees and the local authority can seek to reclaim assets.

For the unwary practitioner who agrees to facilitate such a transfer, the risk is that they may assist in the deliberate deprivation of assets. The issue area for practitioners, highlighted by the Law Society in its guidance, is circumstances where clients may ask practitioners for advice about transferring property or investments to their next of kin, family members, or friends, before their death, as a means of planning for their future care.

It is vital that practitioners advise clients of the benefits and risks, and clarify their role and responsibilities in the process. In circumstances, where clients have taken advice from non-solicitor advice services which includes unjustified claims about gifting of assets to avoid care fees (or IHT liability), the Society says specialist advice should be sought.

The guidance also covers issues including establishing the client’s objectives and understanding, the benefits and risks of transferring assets, money laundering and tax implications.

Incapacitated persons’ wills
In Access and disclosure of an incapacitated person’s will, the issue is that property and financial affairs attorneys and deputies appointed by the Court of Protection owe a duty when making financial decisions, so far as is reasonably possible, to consider succession plans made by the person on whose behalf they act.

Having knowledge of the contents of their will and any codicil means the attorney or deputy is in a position to act in their best interests. The PN clarifies the circumstances in which a solicitor can disclose a copy of a client’s will (and any codicil) to a property and financial affairs attorney or deputy where the client has lost mental capacity.

However, disclosure is not permitted where the client has made clear the will is not to be disclosed prior to their death – subject to a court order requiring its disclosure. If, however, the solicitor believes this is not in the client’s best interests, they must seek a variation of the order by submitting a witness statement to the Court of Protection explaining why the will should not be disclosed.

The guidance also addresses circumstance where there are concerns about the deputy or attorney.

Practitioners are urged to read both PNs in full.

 

 

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