Can I make a gift as an Attorney or Deputy?

There are strict rules and limits on gift-giving as an Attorney or a Deputy. These rules are designed to safeguard the best interests of the person who the Attorney or Deputy is making decisions for.

The Mental Capacity Act 2005 (MCA) provides the legal framework for making decisions on behalf of individuals who lack the mental capacity to make particular decisions for themselves. The Act states that "An act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests."

The main rule regarding making gifts is that the person whose property and finances you are looking after should decide whether to give a gift, if they have mental capacity to do so. Only if you are sure that the person can’t make their own decisions about gifts, can you decide for them.

If you believe it is in their best interests to give gifts, you should consider:

1. The person’s wishes, views and values and how these might affect what they would give
2. What family members and friends think they would have wanted
3. Whether they might regain capacity and be able to make decisions about gifts
4. Their current needs – just because someone used to give very generous gifts, can they afford to now?

If you can answer ‘yes’ to all three questions below, you don’t need permission from the Court of Protection to give a gift:

1. Is the gift to someone related to, or connected with, the person – or to a charity they might normally have given to?
2. If the gift is to a person, is it being made on a customary occasion?
3. Is the gift of reasonable value, given the size of the person’s estate and their expected future needs?

There are serious consequences for making unauthorised gifts. If you make an unauthorised gift that goes beyond your powers as an Attorney or Deputy, the Office of the Public Guardian could:

1. Launch an investigation
2. Give you a warning
3. Ask you to pay back money or return gifts
4. Tell you to apply for ‘retrospective approval’ from the Court of Protection (meaning you ask the court to approve a gift you have already given)
5. In the most serious cases, apply to the court to have you removed as a deputy or attorney
6. Alert the police or other organisations that look after the person’s best interests – abusing your position as a deputy or attorney might count as fraud

In a recent case before the Court of Protection (May 2018) an Attorney who had been appointed as his father’s attorney under an Enduring Power of Attorney had made withdrawals from his incapacitated father’s funds to make gifts to himself and his family. Retrospective approval of the gifts made was sought from the Court of Protection.

The Judge concluded that some of the gifts made could be approved but not all of them. Although the Court of Protection has no jurisdiction to order an Attorney or Deputy to repay the unapproved sums directly, such sums could be pursued through litigation. This however is often costly and not always considered to be in the person’s best interests, not to mention that the Attorney or Deputy may not be able to repay the unapproved sums.

In these circumstances The Judge ruled that the unapproved sums should be accounted for from the Attorney’s share of the residuary estate of his father and if that share is insufficient it should be treated as a debt owed to the estate.

Attorneys and Deputies should be aware of the law regarding their role and responsibilities. In the words of Judge Lush "Ignorance is no excuse."

If you wish to obtain any further information or guidance on your role as an Attorney or Deputy, and in particular to giving gifts, please contact us on 0113 201 4900 or wills.probate@emsleys.co.uk.