Gifting

Posted on February 20, 2019 in General
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If you are an Attorney or a Deputy, it is likely that you will be faced with decisions about gifting. There are strict rules about gifting and a gift can cover:

loans
placing a person’s assets into trusts
selling a property for less than its value
redistributing a person’s inheritance by way of a deed of variation
paying a family member or friend for care (if not already authorised by the Court)

Before doing any of these, you will need to apply to the Court of Protection. The Court will decide whether you can go ahead.

The first step is to check whether the person for whom you act as Attorney or Deputy has the mental capacity to make the decision themselves. When acting as Attorney or Deputy you should always support the person to take part in decisions. This would apply to all decisions not just gifting.

As a Deputy you can only make decisions that the person for whom you are Deputy cannot make. Even if a person appears to have the capacity to make the decision to make a gift, you should be very cautious and if the gift is large, you may need to obtain a Mental Capacity Assessment. As an Attorney, you are restricted by the rules on making gifts, even if the person appears to have capacity to make the decision and has instructed you to make the gift.

Attorneys and Deputies must not take advantage of their position, which means if you are an Attorney or a Deputy, you should not be accepting a gift from the person for whom you are acting.

The rules are quite simple, Attorneys and Deputies must not make gifts from the person’s estate. The law says you can only make gifts when all of the three conditions set out below are met:

It is a customary occasion (birthdays, weddings, civil partnerships, Christmas, Eid, Diwali, Hannukkah and Chinese New Year).
It must be to someone related or connected to the person or to a charity the person may have supported.
It must be of a reasonable value taking into account the circumstances of each case and the size of a person’s estate.
For Attorneys acting under an EPA the exceptions are similar but narrower.

There are also various factors that you must consider when deciding if a gift is reasonable. These include the impact on their financial situation, their current and future income, assets, capital and present and future needs. You must also consider if the gift is in the person’s best interests.

There are some instances when you may exceed your authority but in such a minor way that it does not justify an application to the Court. However, this is only in very specific circumstances and if in doubt you should always seek advice. Deputies and Attorneys are expected to be aware of their legal responsibilities and there is guidance on gifting available from the Office of the Public Guardian (OPG) and on their website.

If you make an unauthorised gift the OPG can do a number of things including:

apply to the Court to remove you as Attorney or Deputy.
apply to the Court to have your security bond called in, if you are a Deputy, and the bond provider would seek repayment from you personally.
ask that you or those who received the gift return it.
instruct you to seek retrospective approval of the gift but only if there is a reasonable chance of success.
refer the matter to the Police as fraud by abuse of position is a criminal offence under Section 4 of the Fraud Act 2006.

For further information about the role of Deputies, Attorneys and making applications to the Court of Protection please contact