Can I make gifts as an attorney or deputy?

Can I make gifts as an attorney or deputy?One of the most common questions I get asked as a later life adviser is whether someone can make gifts under a lasting power of attorney.

The correct answer, as is often the case, is ‘it depends’.

Attorneys (and indeed court appointed deputies) can sometimes give gifts on behalf of the person they have been appointed to help make decisions for.

It is worth noting that only deputies and attorneys making financial decisions can give gifts.

If you have been appointed to make health and welfare decisions, you cannot give gifts based on that authority.

If however you do have the authority to make gifts, you can only do so in some situations and only if it is in the person’s best interests.

The Office of the Public Guardian recently published new advice for attorneys and court-appointed deputies when giving gifts on behalf of another person.

Giving gifts for someone else – A guide for attorneys and deputies

At only nine pages long, this document is an important read for all attorneys and deputies who might find themselves needing to understand whether or not they can make gifts in certain circumstances.

They recognise the importance of gifts, explaining:

Gifts help to preserve the relationships with family and friends of the person whose finances you are helping to look after.

If the person you are looking after has mental capacity, they should decide whether to give the gift.

Assuming mental capacity is an important starting point for any decision making in later life.

If the person you are looking after does not always have mental capacity, you must try to involve them in making decisions about gift giving.

If they cannot decide, then you can decide for them, in line with their wishes, views and values; opinions of family members and friends; whether they might regain capacity in the future; and their current needs.

As an attorney or court-appointed deputy, you can only make gifts to family, friends or charities. You cannot make gifts to a person or organisation unconnected to the gift-giver.

You have to decide whether the gift is ‘reasonable value’ and whether the person can afford to give that gift.

The Office of the Public Guardian explain in their advice that this affordability will vary from person to person, depending on the financial impact of making the gift.

Importantly, attorneys and deputies are not allowed to give away property or spend money as gifts in order to avoid having to contribute to care fees.

This is known as deliberative deprivation of assets and will be investigated by the relevant local authority if it has taken place, with the assets recovered or notionally treated as if the gift was never made.

If the gift you want to make as an attorney does not fit within the rules laid out by the Office of the Public Guardian, you need to apply to the Court of Protection.

This would include, for example, permission to make an interest-free loan.

The guide from the Office of the Public Guardian finishes with a warning that gifts made beyond the authority of the attorney or court-appointed deputy could result in an investigation or even, in the most serious cases, a report to the police.

If you have been appointed as an attorney or deputy to look after the finances for someone else, you need to take the time to understand these rules and follow them carefully, to avoid problems in the future.

Can I make gifts as an attorney or deputy?

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About Martin Bamford

Martin Bamford is a Chartered Financial Planner, Certified Financial Planner (CFP) professional and published personal finance author. He works with elderly clients to provide advice on funding residential care fees, hosts the Informed Choice Podcast and is a keen ultra runner.
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