Making gifts in your role as Attorney or Deputy, rules and pitfalls

Deciding whether or not to make gifts from a person’s estate when you are acting for them as an Attorney or as a court appointed Deputy is an important matter.  You may feel that you wish to make gifts to individuals, either family or friends, or perhaps a charity that you feel the person would have wanted to benefit.  However, there are strict rules surrounding this and it is important to be aware of these so that you do not fall foul of them.

Both Attorneys appointed under a Power of Attorney, and Deputies appointed by the Court of Protection have to adhere to the principles laid down in the Mental Capacity Act 2005 as well as any provisions in the Power of Attorney or Deputyship order.

There is no main approach to Attorneys and Deputies making gifts.  However the overriding principle is that the gift must be in the person’s best interests.  Whether this is the case will depend on the circumstances in each individual matter.  In general terms however Attorneys and Deputies have extremely limited powers to make gifts from a person’s estate.

First and foremost, it must be established whether the person in question has the mental capacity to make the gift themselves, in which case the decision to make the gift should come from them.  If not then the proposed gift needs to be considered in detail to ensure that it can be made within the authority of the Attorney or Deputy.

The general rule is that Attorneys and Deputies should not make gifts from a person’s estate, unless the gift satisfies the following conditions:

·        It is made on a certain occasion, such as Christmas or upon a birthday for example, known as a ‘customary occasion’.  What occasions are deemed to be customary will depend on the particular circumstances.

·        It is made to an individual related or connected with the person in some way or, as stated above, to a charity that the person supported or would have been considered to support.

·        It is of reasonable value and, again, this will depend on the particular circumstances.

If the proposed gift does not fall within the authority of the Attorney or Deputy then an application will need to be made to the Court of Protection for permission.

It is important to note that a gift in this context is not necessarily restricted to simple individual to individual giving and can include:

·        Transferring part or all of a property out of the person’s name to their children,or to other family members for no consideration or consideration at below market value

·        Making an interest free loan from the person’s money – the interest not charged is treated as a gift

·        Placing any assets belonging to the person into a trust

Particular caution should be exercised where the proposed gift is to the Attorney or Deputy, as they must not take advantage of their position.

Melissa Browning, Solicitor and Trust and Estate Practitioner in our Wills, Trust and Probate department at Pictons says:

‘The consequences of making unauthorised gifts from a person’s estate in your capacity as Attorney or Deputy can be very serious and may result in criminal proceedings.  If you are considering making any gifts in these circumstances then we strongly advise that you seek independent legal advice.  Please do contact our Wills, Trusts and Probate Team if you do require any advice and we will be very happy to assist.’

If you have any queries regarding the above then please do contact Melissa Browning on 01582 878549 or by email at melissa.browning@pictons.co.uk or Lisa Murphy on 01582 878515 or by email lisa.murphy@pictons.co.uk