News & Insights

If you are acting for an individual as an Attorney under a Lasting Power of Attorney (LPA), the scope for you to make gifts during the lifetime of the donor (the person who appointed you) is constrained by guidance in the Mental Capacity Act 2005 (MCA 2005).

Essentially, you are limited to;

• Gifts on customary occasions to persons who are related to or connected with the Donor, for example,
  • a birth, a birthday, a wedding or civil partnership or an anniversary.
  • occasions where families, friends or associates customarily give gifts, such as Christmas, Eid, Diwali, Hanukkah or Chinese New Year.
• Gifts to any charity to whom the donor made or might have been expected to make gifts, if the value of each gift is not unreasonable having regard to all the circumstances and the size of the donor’s estate.

In many cases permission from the Court of Protection will be required. A recent case has highlighted this principle.

The case arose from the transfer of a property by an attorney acting under an LPA executed in her favour by her mother.  The mother had three other children but the LPA was made without consultation with them.

The daughter in whose favour the LPA was granted transferred property from her mother’s sole name into the joint names of her mother and herself.  Following the mother’s death the executor of her estate – her son – brought a challenge to the property transfer and argued that the gift was impermissible.

The court held that the transfer of the property into joint names was not authorised because permission had not been sought from the Court of Protection to do so.  The transfer was therefore void and the property had to be put back into the mother’s estate.

The court summarised the duties of an attorney in this kind of situation and emphasised that lack of knowledge or ignorance of the law or of the need to seek the court’s permission to make gifts which are outside the scope of the MCA is not a defence; and if an attorney is in doubt they should seek legal advice.

Detailed guidance about making a gift as an Attorney or Deputy can be found here:

https://www.gov.uk/government/publications/giving-gifts-a-guide-for-deputies-and-attorneys

Contact us

If you would like to discuss any gifts you are considering making on the behalf of a Donor, please contact one of our Wills, Probate, Tax and Trusts experts.

If you have a contentious issue with a gift, please contact one of our Inheritance Disputes experts.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.