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The Law Society - Conveyancing

30

Apr

2014

Gifting by Deputies under a Lasting Power of Attorney

Recent case law has highlighted the issue of making gifts on behalf of a person without mental capacity under the auspices of a Lasting Power of Attorney.

An Attorney is granted limited power to make gifts on behalf of the Donor of a Lasting Power, even after they have lost capacity to agree to these, subject to a number of limitations and conditions.  The gifts must only be to charities, relatives/very close friends, or an Attorney themselves; and can only be made on very specific customary occasions for a value that is ‘appropriate to ‘ the assets of the Donor.  Deputies are usually granted similar gifting powers within a Deputyship order.

However, Attorneys should take great care when seeking to make gifts, particularly where the value of these or the occasion chosen for them does not fall within the Court’s very strict guidelines.  Senior Judge Lush recently required Deputies to repay all but £15,000 of gifts totalling £59,000 made over a three year period against an income of £10,00 per annum in the case of Re Joan Treadwell (Deceased) [2013] EWHC 2409 (COP).  Acceptable limits for the value of gifts to celebrate specific events, such as christenings or graduations, were discussed, as was the overall limit on gifts in any one year.  Other case law also supports the guidance that, even for more substantial estates, authorisation should be sought from the Court of Protection for significant gifts.

When an Attorney is comfortable that the proposed gift would not require authorisation, and fall well within the guidelines set out by the Court, in any order, or as laid out in section 12(3) of the Mental Capacity Act 2005; they must still be satisfied that the gift is within the ‘best interests’ of the Donor.  This is a very contentious test, and one which has been considered in further case law.

We would advise Attorneys seeking to make significant gifts under a Lasting Power of Attorney, of Deputies seeking to gift under a Deputyship Order, to seek advice before doing so.  Our team of specialist lawyers is available to provide advice at either our Cockfosters or Barnet offices.

 

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