Making a Gift as an Attorney or Deputy

Deciding whether or not you should make a gift as an attorney or deputy is important. 

When appointing a deputy, the court will grant the deputy power to make small gifts to charities or to individuals, as the person who lacks capacity may be expected to make on customary occasions. Similarly, attorneys responsible for someone’s property and financial affairs are able to make such gifts unless this power was excluded within the lasting power of attorney document.

However, this power is conditional on the value of the gift. This cannot be unreasonable knowing all the circumstances and, in particular, the size of the person who lacks capacity’s assets.

What is “reasonable” and “customary” is different in every case and so attorneys and deputies can find themselves unaware they are acting outside of their authority. 

For example, it could be a family tradition to gift a grandchild £1,000 to pay for driving lessons on their 18th birthday. Should the size of the person who lacks capacity assets total £300,000 then it is arguable that such a gift is reasonable and will not require the court’s authority. However, if their assets total only £30,000 then this gift is significant and will likely require court approval.

Often the difficult part of being an attorney or deputy is that you know or believe the loved one would make the gift in any event if they had the capacity to do so. This leaves them in the difficult position of balancing their loved ones’ likely wishes and beliefs and what is in their best interests.

Often, attorneys and deputies do not realise that court approval should have been obtained before making the gift. As making a gift outside of your authority as deputy or attorney is a breach of the deputieship order, the Office of the Public Guardian, who monitors deputies. They can take a range of actions from:

• launching an investigation
• issuing a warning
• asking the attorney or deputy to pay back money
• have them return the gifts 
• in the most serious cases, apply to the court to have the deputy or attorney removed

Can the issue be resolved or is it too late?

The issue can be resolved by the attorney or deputy making an application for retrospective consent to the court. Only on the basis that they acted in good faith and in the honest belief that they were making a decision that was within their authority and in the person’s best interests.

Given the potential action that the Office of the Public Guardian could take should an attorney or deputy make a gift outside of their authority. Even if the gift was made as a mistake, it is always recommended that legal advice is taken before a significant gift or a gift that is outside of traditional customs is made. 

We have a dedicated team here at Birkett Long who could assist you with such matters. If you would like advice, I can be contacted on  01206 217307 or [email protected].