Lasting Powers of Attorney for Property and Finances allow a person (the doner) to appoint someone, known as an attorney, to act on their behalf to make decisions relating to their property and finances. This authority extends to when the person has lost capacity.
Gifts and the Mental Capacity Act
As an attorney you have a duty to act in the best interests of the person and to comply with the Mental Capacity Act, in particular the Code of Conduct.
If the donor still has mental capacity, they can make gifts themselves without the need to involve their attorney with this. However, in circumstances where the donor has lost capacity, there are strict limits on the kinds of gift that an attorney can make on the donor’s behalf.
Reasonable gifts
Where a donor lacks capacity, an attorney is able to make gifts which would be considered as reasonable with regard to the donor’s financial resources. For example, an attorney can give gifts only on customary occasions such as birthdays, anniversary, Christmas or weddings. If the donor was making regular gifts such as to a charity the attorney is able to continue these again, with regard to the donor’s financial resources.
Excessive gifts
An attorney cannot make gifts that are excessive and not for customary occasions including for inheritance tax planning or pay school fees for the donor’s grandchildren without making an application to court.
Gifts must serve the donor’s best interests and not the attorneys, it would be wrong to use the person’s funds to buy big gifts for the attorney’s own close family. Before making any large gifts of money or property, for assistance as part of planning for the inheritance tax, an application to the Court of Protection for permission must be made. If such a gift is made without permission, the attorney may have to pay it back.
The above also extends to loans. Loans are rarely allowed by attorneys and again, in order to make a loan from the donor’s funds, an attorney would need to apply to the Court of Protection.
Legal Advice
If you are acting as an attorney and are in any doubt about whether you can make a gift using the donor’s funds, seek professional advice or guidance from the OPG. Our friendly and experienced Life Planning team will be happy to assist you with this and can provide you with full advice on your role and obligations as an attorney.
With previous experience in family law, Emma is skilled in dealing with matters in a sensitive and non-confrontational way. Emma is also a Dementia Friend and has an understanding of the affects dementia has on both the sufferer and the family.
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