Do Attorneys and Deputies have the authority to make a gift?
With Christmas on the horizon, attorneys and deputies may be considering whether they have authority to make gifts to family members and friends of P (the person whose property and finances they manage). For example, an individual may have been appointed as attorney under a Lasting Power of Attorney for Property and Financial Affairs for their elderly mother or father and they are confused as to whether they have authority to gift £50 to P’s grandchildren at Christmas. The Office of the Public Guardian has issued guidance for attorneys and deputies regarding their authority to make gifts.
The primary duty of attorneys and deputies is to act in P’s best interests. Attorneys and deputies have a duty to protect P’s interests, to administer their financial affairs and property for P’s benefit, to keep their own money separate from P’s and a duty not to take advantage of their position as attorney or deputy.
There is no general approach to gifts. Each decision to make a gift must be considered by its own content and timing and must be made in P’s best interests. What amounts to P’s best interests must be determined on each occasion taking into account all of the relevant circumstances and taking into account Section 4 of the Mental Capacity Act.
A gift is made when an attorney or deputy transfers money, property or a possession of P to themselves or other people. When considering whether to make a gift, the gift should be a reasonable amount which would normally be incurred and must be affordable to P, taking into account P’s future needs.
With regard to deputies making gifts, a deputy’s power to make gifts are set out in the Order appointing them as deputy. When considering whether to make a gift, deputies should carefully check the terms of their Order and seek advice from the Office of the Public Guardian (OPG) or from a solicitor if they require clarification of their powers. Most Orders give deputies limited powers to make gifts and the Order will usually allow for the following;
- The power to make a gift on a customary occasion (such as Christmas and birthdays) to relatives or persons connected to P provided the gift is not unreasonable having regard to all of the circumstances and in particular the size of P’s estate.
The power to make charitable gifts that P might have made, provided that gift is not unreasonable having regard to all of the circumstances and in particular the size of P’s estate.
For attorneys appointed under an Enduring Power of Attorney (EPA), the Mental Capacity Act states that an attorney may;
- Make gifts of a seasonal nature (Christmas!), or a birthday, or anniversary of a marriage or civil partnership.
- The above gifts may be made to a person (including the attorney) who are related 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.
Finally, attorneys appointed under an LPA for Property and Financial Affairs have no authority to make gifts under the Mental Capacity Act except in the following limited circumstances;
- Attorneys must only make gifts on customary occasions (eg Christmas, birthdays, wedding anniversaries or any other occasion where presents are customarily given).
- These gifts may 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 made or might have been expected to make gifts.
- The value of each gift should not be unreasonable having regard to all of the circumstances and in particular the size of P’s estate.
Where attorneys and deputies are considering a gift which exceeds their authority, they must apply to the Court of Protection for authority to make the gift.
There are consequences for attorneys and deputies who make unauthorised gifts. The OPG can investigate and ask for an account of any gifts made. Therefore, attorneys and deputies must keep a record of any gifts made and the circumstance in which the gift was made. Below are some of the consequences for attorneys and deputies if they make unauthorised excessive gifts. The OPG may;
- Apply to the Court of Protection for removal of the deputy or attorney (and if appropriate, ask the Court to arrange for a deputy or new deputy to be appointed.
- Apply to the Court of Protection for the security bond of a deputy to be called in (deputies).
- Instruct the attorney/deputy to apply for retrospective approval from the Court of Protection in circumstances where such an application would have a reasonable prospect of success.
- Request the attorney/deputy to seek the return of the gifts and restitution of P’s assets.
- Refer the matter to the police or other relevant regulatory or safeguarding bodies.
If you are an attorney or deputy and you require advice in relation to making a gift or applying the Court of Protection for authority to make a gift, please contact Hannah Rowlatt in our Court of Protection team on email@example.com or 023 9236 4306.