Zoe Hodge, Senior Associate, is an experienced private client solicitor with a particular interest in Court of Protection matters. In the next article in our series, Zoe looks at making gifts on the donor’s behalf.
I’m an Attorney/Deputy, can I make gifts on the donor’s behalf?
First, you need to work through the five main principles of the Mental Capacity Act 2005 (see our blog Are you an Attorney or a Deputy? Do you know what your legal rights and responsibilities are? – Greene & Greene) to determine whether you can make such a decision on behalf of the donor.
If you determine that it is right for you to make this decision, then the next step is to check the instructions (section 7) in the Lasting Power of Attorney (“LPA”) or the Court Order for any contrary intention.
Subject to the above, you can proceed but only in the following circumstances:
- The gift is being made on customary occasions such as birthdays, marriages, Christmas or any other occasion on which presents are usually given to family and friends such as, but not limited to Eid, Diwali, Hanukkah or Chinese New Year.
- These gifts may be made to persons (including the attorney) who are related or connected to the donor.
- Gifts may also be made to any charity to which the donor made or might have expected to make gifts.
- The value of each gift must be reasonable given all circumstances, such as the size of the estate and consideration must be given to what has been done by the donor in the past.
If an attorney wishes to make a more substantial gift, for example, inheritance tax planning or a gift which goes outside of the above parameters, then an application to the Court of Protection must be made to authorise the gift.
Gifts include:
- Paying for grandchildren’s school fees.
- Selling a property for less than market value.
- Making an interest-free loan to someone.
- Allowing someone to live in the property rent free or for below market rent.
You should keep a record of the gifts you make and your thought process as to how you reached that decision every time.
Please note that an Attorney is under no obligation to make any gifts on behalf of the donor unless the LPA or Order state differently.
If you make a gift outside of your authority to do so, you could be breaking the law, and you should seek legal advice as soon as possible.
The Office of the Public Guardian (OPG) may investigate your actions and, if necessary, remove you as an Attorney. They may seek repayment of the gifts or ask you to pay the money back. They may tell you to make an application to the Court of Protection for retrospective approval of the gift.
Deputies will need to report the gifts on the annual report which is submitted to the Office of the Public Guardian. If you have exceeded your authority, the level of OPG supervision maybe revised, the security bond may be called in and the Deputy might have to pay the donor back for what they have lost.
This is only intended to be a summary and not specific legal advice. Should you require more information or would like to speak to us, please contact Zoe Hodge, or another member of the private client team.
