Can Attorneys appointed under a Lasting Power of Attorney give gifts?

 

Many people are honoured when asked by a loved one to act as an attorney under a property and financial affairs Lasting Power of Attorney (LPA). An LPA covers decisions about your financial affairs, or your health and care. It comes into effect if you lose mental capacity, or if you no longer want to make decisions for yourself. However, few people understand the implications of agreeing to be an Attorney, including that they risk being investigated by the Office of the Public Guardian (OPG).

One of the most common reasons for an OPG investigation, is when they have been alerted that an Attorney has made a gift under an LPA. Quite often, the Attorney has made the gift in good faith and without any intention of exceeding their powers but without full knowledge of what they can and can’t do as an Attorney. Imagine the scene: Silvia is suffering with dementia and has created an LPA, appointing her daughter Christine as her Attorney. It’s Christine’s daughter’s 21st birthday and she’d like her to receive a special present from her grandparent. Christine buys her daughter a £500 gold bracelet. Christine chose not to consult with Silvia, as her mother would be unable to understand the conversation but believes she would have wanted to buy a special gift so uses her money to buy the bracelet anyway. In the past, Silvia has spent around £50 on her grandchildren which leaves Christine’s brother Mike unhappy, as he thinks Christine has acted in her own interests. He decides to make a complaint to the OPG. An OPG investigation can be very stressful and invasive. To avoid this, it’s vital that Attorneys are aware of their powers when it comes to making decisions and gifting in particular.

 

The general rules about gifts made under an LPA

The general rule is simple: you must not make gifts as an Attorney (without the authority of the person you have appointed the Attorney – the Donor) apart from some limited exceptions.

To qualify as an exception, the gift must satisfy the following three points;
    1. Be given on a customary occasion (i.e. birthday, births, weddings or civil partnership, Christmas, Eid, Diwali, Hanukkah and Chinese new year);
    2. and Be gifted to someone related or connected to the Donor or to a charity the Donor supported or may have supported;
    3. and Be of reasonable value taking into account the circumstances and the value of the Donor’s financial assets.

 

What should Attorneys do if they want to give a gift under an LPA but the Donor has not given authority and they believe they do not have capacity to make a decision?

The first stage is for the Attorney to take all reasonable steps to help the Donor make an independent decision. This would include providing all information required to make the decision and possible consequences of making the gift.

If, having taken these steps, the Attorney believes the Donor lacks capacity, they must not make any gifts apart from those exceptions detailed above. If Attorneys give gifts outside of their powers, there may be serious consequences. If the OPG commence an investigation they may give the Attorney a warning, request the value of the gift is repaid, and in serious cases, they can apply to the Court of Protection for the Attorney to be removed.

If an Attorney has any doubts about making gifts under an LPA, they should seek legal advice from an experienced SFE lawyer. It’s much better to take a proactive approach and avoid the stress and emotional burden that can result in making a decision that exceeds their power.

 

 

 

Amy Nelson

Head of Private Client at BakerLaw LLP

Amy Nelson is Head of private client at BakerLaw LLP in Farnham, Surrey with over 15 years’ experience dealing with a range of private client work including wills, probate, powers of attorney and trusts. She specialises in trusts and probate. Amy is a fully accredited member of Solicitors for the Elderly (SFE), a Trust and Estate Practitioner and full member of STEP and a dementia friend.

BakerLaw LLP are an award-winning local firm that prides itself on being small enough to care about each client but big enough to deliver a high quality service. The team provides a wide range of services to both individuals and businesses both locally and nationally.