Settlements of property for persons lacking capacity: principles, practices, and problems

Abstract

Abstract The settlement of property for persons who lack capacity under the statutory powers conferred by mental health legislation requires courts and practitioners to have a firm understanding of the fundamentals of trust law as well as a clear appreciation of the administration of trusts in practice. This article considers, making reference to recent case authority from England and Hong Kong, the following aspects of the issue: (i) whether there is any presumption or starting point under the statutory regime in favour of appointing deputies rather than establishing trusts; (ii) the factors that should be considered by the courts in deciding whether to establish trusts for persons lacking capacity; (iii) whether and to what extent trusts have a role to play in solving or reducing any perceived resource deficit in the supervisory machinery established under the statutory regime; and (iv) difficulties encountered with complex trusts.