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GIFTS – THE OFFICE OF THE PUBLIC GUARDIAN ADVICE FOR DEPUTIES AND ATTORNEYS
The primary duty of a Deputy or an Attorney is to make decisions in the best interests of the person for whom they have been appointed (“P”).
The Deputy of Attorney makes a gift when they transfer money, property or possessions from P to either themselves or to other people. This can include, for example, an interest-free loan, as the interest waived is in effect a gift.
The Deputy’s main duty is to provide for P’s needs and their powers are set out in the Order of the Court of Protection appointing them as Deputy and therefore the Deputy needs to check the terms of the Order very carefully. The Deputy can only make gifts in accordance with the provisions contained in the Court Order, which would usually allow the Deputy to:-
- make gifts on customary occasions to relatives or persons connected to P, provided the value of the gift is not unreasonable having regard to all the circumstances and, in particular, the size of the Estate; and
- make gifts to charities which P might have made, provided that the gift is not unreasonable having regard to all the circumstances and, in particular, the size of the Estate.
The Deputy would need to make an application to the Court of Protection for authority to make any other gifts.
An Attorney appointed under an Enduring Power of Attorney has his main duty as being to provide for P’s needs and in this regard they should consider their obligations under the Mental Capacity Act, which provides that an Enduring Power of Attorney Attorney may:-
- make gifts of a seasonal nature on the anniversary of a birth, marriage or civil partnership;
- make seasonable or anniversary gifts to persons (including Attorney) who are related to or connected to P;
- make gifts to any charity to whom P made or might have been expected to make gifts.
The value of each gift should not be unreasonable having regard to all the circumstances and, in particular, the size of P’s Estate. The Attorney should consider any restrictions or conditions contained in the Enduring Power of Attorney.
A Property and Financial Affairs Lasting Power of Attorney Attorney’s main duty is to provide for P’s needs. The Mental Capacity Act sets out specific cases where the Attorney has authority to make gifts and they are not allowed to make gifts in any other circumstances. These are:-
- on customary occasions;
- customary occasions would be anniversary of a birth, a marriage or the formation of a civil partnership, or any other occasion on which presents are customarily given within families or among friends or associates;
- these gifts can be made to persons (including the Attorney) who are related to or connected with P;
- gifts may also be made to any charity to whom P might or might have been expected to make gifts;
- the value of each gift should not be unreasonable having regard to the circumstances and, in particular, the size of P’s Estate.
The Attorney must follow any restrictions or conditions in the LPA about gifts.
No Attorney or Deputy is obliged to make any gifts.
If a Deputy or Attorney wants to make gifts outside the scope of their authority, they must make an application to the Court of Protection and obtain a Court Order.
There is no formal definition as to what is reasonable or unreasonable with regard to a gift and a Deputy or Attorney is expected to decide this, which would depend on P’s particular circumstances.
Most Deputy orders would allow a Deputy to make a decision for the needs of others, although there is no clear definition as to what the needs. If in doubt, an application will need to made to the Court of Protection for a Court Order.
The Mental Capacity Act allows an Enduring Power of Attorney Attorney to benefit themselves or others if P might be expected to provide for his or that person’s needs, so the Attorney may do whatever P might be expected to do to meet those needs. Again, the Mental Capacity Act does not define what is meant by “needs”.
The Mental Capacity Act does not expressly permit an LPA Attorney to benefit themselves or other persons by providing for their needs, but the Court of Protection has confirmed that an LPA Attorney may provide for the needs of the family members if P is legally obliged to maintain them. If in doubt, or if the Attorney wishes to benefit anybody else, an application must be made to the Court of Protection.
If unauthorised gifts are made, the Public Guardian can investigate and ask for an account of any gifts made. It is therefore essential that Deputies and Attorneys keep a record of any gifts made and the circumstances and provide an account if requested to do so.
If a Deputy or Attorney makes excessive gifts, the Public Guardian can apply to the Court of Protection for removal of the Deputy or Attorney, or for the Court of Protection to make an Order for a Security Bond of a Deputy to be called in, or instruct the Deputy/Attorney to apply for retrospective approval from the Court of Protection, or request that the Deputy/Attorney seeks the return of the gift and restitution of P’s assets, or refer the matter to the Police or other regulatory or safeguarding bodies.
If you require any advice with regard to the making of gifts under an Enduring Power of Attorney, Lasting Power of Attorney or Court of Protection Order, please do not hesitate to contact any of our team at Parkes Wilshire Johnson, 1 Cockfosters Parade, Cockfosters, Hertfordshire EN4 0BX or 59 Church Hill Road, East Barnet, Hertfordshire EN4 8SZ (telephone 020 8441 1556, e-mail: email@example.com).