Acting as an Attorney or Deputy in relation to another person’s Finances and Property is a huge responsibility. It is always sensible for an Attorney or Deputy to seek legal advice about what they can and cannot do whilst acting as an Attorney or Deputy to be sure about their duties and responsibilities.
One area that Attorneys often get wrong is making gifts on behalf of the person who has lost capacity. An Attorney might continue to make gifts to family members or charities in the same way that the incapacitated person did before they lost capacity. This is not permitted by law and if an Attorney or Deputy makes a gift that goes beyond their powers, then the Office of the Public Guardian could launch an investigation, ask for the money to be repaid or seek an Order to remove the Attorney/Deputy.
Unless the Power of Attorney document or Deputy Order says otherwise, an Attorney/Deputy can only make a gift if it is for:
- A family member, friend or acquaintance on a ‘customary occasion’; or
- Charity
Customary occasion means birthdays, weddings, anniversaries, Christmas, Eid other religious festivals. The value of the gift must be of reasonable value given the size of the person’s estate and similar gifts that the person made while they had capacity.
As a rule of thumb, gifts that exceed the Inheritance Tax threshold of £250 per person in any year (the threshold below which a gift is completely ignored for Inheritance tax purposes) will require permission. Assets cannot be gifted that will result in not being able to pay for care fees. Attorneys should consider carefully before making any gifts on such customary occasions.
If the gift is likely to be deemed unreasonable, or if an Attorney/Deputy wants to consider making a gift for any other reason, then they must seek approval from the Court of Protection before making the gift. There is a specific Application to submit to the Court, which we can assist with.