Giving Gifts Guide for Powers of Attorney
When a donor creates Lasting Powers of Attorney for property and financial affairs, they appoint attorneys who are given authority under the Mental Capacity Act 2005 to make best interest decisions on behalf of the donor if the donor loses mental capacity to make decisions about their own money or property.
Many attorneys, often acting on behalf of a family member, will be unaware of the rules regarding making gifts on behalf of the donor generally but especially at Christmas. The Office of the Public Guardian has recently released new guidance on this topic which is summarised below.
What is a gift?
A gift must be a ‘reasonable gift. In order to assess whether a gift is reasonable, the donor’s finances should be reviewed. A gift must not cause them hardship or affect their ability to pay for care and everyday needs. A gift should be comfortably affordable and not substantial.
When can gifts be made?
Gifts should only be made on a ‘customary occasion’ such as weddings, civil partnerships, anniversaries, birthdays, graduations, Christmas, Eid, Diwali, Hanukkah or Chinese New Year.
Attorneys should only make gifts if the donor has expressed a wish for them to do so, or if it is in the donor’s best interest, as this is what they would normally have done when they had capacity.
If possible, an attorney should ensure that they consult the donor before making a gift. If the donor has fluctuating capacity, they should be consulted at a time where they are able to understand the conversation. If a donor has capacity, then gifting must be their own decision.
When an attorney does not have authority to make a gift
If a gift is substantial, or an unreasonable gift is made, or the donor’s money has been used to gift to an attorney, the Office of the Public Guardian (OPG) will investigate the gift that has been made.
If the gift is against the rules, the OPG may ask for the gift to be returned or an attorney may need to seek retrospective approval from the Court of Protection. Depending on the circumstances, there is also a chance that the attorney could be removed from their position or risk being the subject of a criminal prosecution.
Any gifts that are not reasonable must have prior approval from the Court of Protection.
Do you need further advice?
If you are acting as an attorney and you would like further advice or assistance, please contact a member of the Private Client department.
“This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.”