Attorneys making gifts under an LPA this Christmas – what you need to consider

With Christmas around the corner, you’re probably finishing up your Christmas shopping and getting ready for the festivities. If you’re an attorney under a property and finances lasting power of attorney (LPA), there are some important points to consider before you authorise any gifts on behalf of the donor. There are restrictions in place to ensure any gifting is made in the donor’s best interest, and even with the best intentions, you could fall foul of the strict limits set by the Office of Public Guardian guidance and Court of Protection judgements.  This blog highlights the dos and don’ts for attorneys giving gifts on behalf of donors when they lack capacity.

What is a gift under an LPA?

A gift under an LPA can range from a small charity donation made each Christmas to the donor’s chosen charity to a more sizable gift, such as contributing to a grandchild’s university fees.

Can I make a gift on behalf of the donor?

Under section 12 of the Mental Capacity Act 2005, as an attorney for a property and finances LPA, you can only make gifts on behalf of the donor from their estate:

• on a customary occasion, such as Christmas, a wedding, or a birthday, to someone who is related or connected to the donor (friends, family or associates)
• to a charity the donor might have been expected to donate to
• if the value is reasonable to the circumstance. Many factors can contribute to this, with the size of the donor’s estate being the main one.

What is a ‘reasonable’ gift under a Property and Finances LPA?

If you are planning to give gifts this Christmas on behalf of a donor, you should consider their:

• income and living costs
• future needs
• investments and savings
• wishes and values
• age and life expectancy.

What can’t I gift under a property and finances LPA?

If you want to give a gift to yourself, give a high-valued gift, or give a gift that is not on a customary occasion (such as for saving inheritance tax), you’ll need to apply to the Court of Protection for authority to make these gifts.

What happens if I make a gift on behalf of a donor that isn’t reasonable?

If you don’t get the authority for a gift that the Court of Protection doesn’t deem as ‘reasonable’, you may run the risk of being investigated by the Office of Public Guardian and the Court of Protection removing you as an attorney.

How can I make sure the gifts I make on behalf of a donor are what they want?

When the donor sets up their LPA, they can provide you with instructions on what gifts they would want you to make on their behalf should they not have the capacity. This provides you helpful guidance on what can often be a confusing area.

Can I accept gifts for myself as an attorney?

As an attorney, you must always act in the best interests of the donor, and neither you nor anyone connected to you can benefit from your appointment.

If you do accept a gift for yourself, the Court of Protection will review carefully whether the donor had capacity and may decide you went beyond your authority as attorney. In this situation you may be removed from your role as attorney.

Should I keep a record of gifts made under an LPA?

Yes, you should always record the gifts you give on the donor’s behalf, as the Office of the Public Guardian may ask you to report on the gifts you’ve made.

Gift giving – legal guidance for attorneys

In a nutshell, in your role as attorney you must always keep to the rules around gift giving. It’s sensible to review potential gifts (no matter how small) with your solicitor to avoid the risk of the accidental misuse of the financial power of attorney.

Contact our dedicated Court of Protection team for clarity on your duties and responsibilities as an attorney under an LPA.