There may be instances where as a deputy/attorney you may need to make gifts from the person’s fund, this could be on special occasions such as birthdays, religious holidays or other customary occasions. If the person has capacity and authorises their deputy/attorney to give a gift on their behalf and it is documented, there usually will not be any issue. However, where the person lacks capacity and the deputy/attorney gives a gift from the person’s fund then there are some rules the deputy/attorney should be aware of.
On 18 January 2018, the Office of the Public Guardian (OPG) published its legal guidance for professional deputies and attorneys on the rules about giving gifts. Some of the key components mentioned in the legal guidance will be discussed below.
What does the law really mean when it refers to a ‘GIFT’?
Here are 5 Key Points to what a gift can include:
- Making an interest free loan from the person’s funds.
- Creating a trust of the person’s property.
- Selling a property for less than its value.
- Changing the will of someone who’s died by using a deed of variation to redirect or redistribute the person’s share in the estate.
- Making payments from the person’s estate for care that someone gives them if the Court has not already authorised those payments to be made.
For any of the above steps, you need to apply to the Court of Protection for authority prior to making the gift.
Strict rules on gift-making
The reason why you need to apply to the Court of Protection is due to the fact that there are strict rules on gift-making. As a deputy or attorney, you have limited powers to make gifts on the person’s behalf. In a lot of cases, you will need to seek the Court of Protection’s authority before making such gifts. The Court of Protection has the power to either approve or refuse your application.
Making a gift is similar to other decisions a deputy or attorney makes and as such, you have to assess whether or not it is in the person’s best interests or not before making such a decision. However, deputies and attorneys also have a duty before making a gift, to consider whether the person:
- has mental capacity to understand the decision to give a gift; and
- can take part in the decision.
If the person has capacity to make a gift, then they should normally make the gift themselves. As a deputy, your authority is strictly limited to making decisions that the person lacks capacity to make. As an attorney, you are restricted by the legal limits on your gift-making authority, even if the person seems to have capacity and has instructed you to make a gift on their behalf. If in doubt regarding the person’s mental capacity to make a gift, you should seek a medical opinion to clarify.
Involving the person in the decision
Even when the person lacks capacity to decide about a gift, as a deputy or attorney, you should still encourage them to participate in decision-making as they may have views on the gift and prefer one choice rather than another. However, it may not always be in the person’s best interest to be involved in the decision making, it will vary depending on the decision in question.
Accepting a gift for yourself
Deputies and attorneys need to be very careful when accepting a gift from the person’s estate. You must not take advantage of your role as a deputy or attorney to benefit yourself. If you do accept a gift, the Court of Protection can look carefully at whether the person had capacity and may decide you went beyond your authority.
For further advice regarding the general rules about gift making, what constitutes to a reasonable gift, gifts of property, the person’s will and applying to the Court of Protection, please do not hesitate to call us on 020 8492 2290.
Trainee Solicitor Wills, Trust and Probate Department
Posted on Monday, 3rd June 2019