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Giving Wisely - What Should Attorneys Consider?

on Wednesday, 18 March 2020.

In 2018/19, the Office of the Public Guardian (OPG) recorded a 55% increase in applications to the Court of Protection (COP) to censure or remove attorneys, with improper gift-making and not acting in the donor's best interest being the two main concerns.

A property and financial affairs Lasting Power of Attorney, or an old-style Enduring Power of Attorney, grants an attorney authority to make decisions that help protect the financial interests of the donor, but attorneys must take care when using this authority.

What Constitutes a Gift?

Gifts typically involve giving money or possessions to relations and friends on birthdays, weddings, or other occasions. The law sees donations to charity as gifts. However, attorneys may have to decide about less common gifts where issues may arise, such as paying school fees, making interest-free loans (where the waived interest is the gift), or creating a trust of the donor's property.

Is the Gift Reasonable?

This can be hard to determine. There is no precise definition of what makes a gift ‘reasonable’. An attorney should look broadly at the effect the gift will have on the donor’s current and future financial situation, and consider whether the gift is in the donor’s best interests. Some factors to consider are:

  • whether the gift is affordable
  • whether the donor would have made gifts of this size
  • the donor's life expectancy and whether funds may be needed for future care costs
  • how the gift might interfere with legacies in the donor's Will
  • whether the donor would have supported the charitable cause, for gifts to charities

Limits on an Attorney’s Authority

Attorneys should always check that there are no specific or general restrictions in the Power of Attorney document that restrict their authority to make gifts. Attorneys must also take into consideration the relevant statutory principles of the Mental Capacity Act 2005 and the OPG guidance on gifts.

Most importantly, attorneys must act in the best interests of the donor by making decisions that they consider the donor would have made themselves.

If the attorney is in doubt or believes a proposed gift falls outside their authority, the attorney should apply to the COP for approval before making the gift.

Whilst the COP recognises limited circumstances when an attorney may make larger gifts without making a court application, these circumstances are specific and advice should therefore be taken before proceeding.

Consulting the Donor

A point often overlooked is that the attorney should consult the donor about the gift, if they can. The attorney should encourage the donor to participate in the decision if possible. This is useful even if the donor lacks capacity, as involving them in any decision about making a gift helps to ensure that an attorney is acting in the donor's best interests.


Whether you are acting as an attorney or are looking to make an LPA, we can provide advice to help you understand the implications and restrictions involved.

Contact Rachael Armstrong in our Private Client team on 0121 227 3726 for more advice, or complete the form below.

 

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