As the Festive Season is in full swing, we all enjoy the prospect of giving (and receiving!) gifts to our loved ones. In circumstances where someone has lost or has started to lose capacity, they may have appointed Attorneys by a Lasting Power of Attorney, or a Deputy may have been appointed by the Court of Protection to assist them with their finances.
Gifting at Christmas can be an important factor for Attorneys and Deputies to consider, not only because the incapacitated person may have wished to give gifts, but it can also be beneficial in maintaining the normal family connections with their loved ones.
Can Attorneys and Deputies Purchase Gifts?
Lasting Powers of Attorney for Financial Decisions can be drafted in a way that allows the Attorneys to act whilst the donor still has capacity. This is useful in situations where the Donor may be housebound or have difficulty communicating, or otherwise may be away from their home and unable to directly manage their affairs.
If the donor still has capacity, they would take the decision as to any gifts made from their own assets. For example, a donor with capacity may ask their Attorney to make gifts to their loved ones at Christmas on their behalf.
If the donor has fluctuating capacity, their ability to make decisions may changes depending on their condition or time of day (which is common with conditions such as dementia). In such situations, before making any gifts the Attorney(s) must consult with them at the time that their capacity is usually at its best. This can sometimes be difficult to assess and may require specialist advice.
If the donor no longer has mental capacity, there are strict limits on what gifts an Attorney(s) or Deputy can make on behalf of the person they are assisting.
Unless there is any specific authority given in the Lasting Power of Attorney or in the Deputy Order to the contrary, gifts made by an Attorney or Deputy can only be made to a family member, friend, or acquaintance on a “customary occasion”, and must be reasonable in value. Gifts cannot be given to someone with no connection to the person on whose behalf the gift is being made.
Customary occasions include events such as a birthday, wedding, anniversary, or events where gifts are customarily given, such as Christmas, Eid, Diwali or Hannukah. Reasonable in value depends greatly on each person’s circumstances and must consider their finances, should be affordable and should not impact their ability to pay for their own care.
Gifting must be carefully managed, as improper gifting (gifting too much or to people not entitled to receive gifts from the gift-giver), can come with wide ranging consequences, including the council requiring funds to be returned to the gift-giver’s possession if they deem it to be a deliberate deprivation of capital, or an investigation by the Office of the Public Guardian. In some circumstances large gifts may be deemed appropriate upon an application to the Court of Protection but an Order of the Court would be required to authorise such a gift.
When acting as an Attorney or Deputy, you should take legal advice to ensure compliance with the relevant rules relating to gifting and mitigate the risk of potential challenges to the gifts.
Speak to a legal expert
If you are considering preparing Lasting Powers of Attorney, require assistance with applying for a Deputyship for a loved one, or you are an Attorney or Deputy looking for assistance with carrying out your duties, please do not hesitate to contact our Trusts & Estates Department, Heather Lally or Stephen Mackellar on 01244 354800 or email: Heather.Lally@dtmlegal.com or Stephen.Mackellar@dtmlegal.com.
This article is not intended to be comprehensive or to provide specific legal advice. It should not be relied upon in the absence of specific advice given in relation to particular circumstances.
