A Gift-Giving Guide for Attorneys and Deputies : What you need to know this Christmas

With Christmas fast approaching, if you are an attorney or deputy, it is essential you understand what can and CANNOT be given as a gift.  The Office of the Public Guardian (OPG) has recently updated their guidance to better protect vulnerable people.

The Basics:  What is allowed?

S12 of the Mental Capacity Act 2005 outlines that attorneys and deputies can make small gifts on “customary occasions” such as birthdays, holidays, anniversaries or to charities who the person has supported in the past. However, this is strictly regulated to ensure that the interests of the vulnerable person who lacks capacity are safeguarded.

Any gifts you make as attorney MUST be reasonable and you should consider:

• Did the person make gifts of this value when they had capacity?
• Would the gift affect the person’s ability to meet their living expenses, including care fees, now or in the future?
• Have you taken all reasonable steps to help the person decide for themselves? Can the decision wait?

Whether it is giving a birthday present or making a donation to charity, gifting must always be approached in the best interests of the person you are representing and with an understanding of the Mental Capacity Act 2005.  You must refer to the person’s wishes and feelings, their financial means and patterns of historic spending to determine whether it is in their best interests to give the gift.  Any decision must be recorded in writing.

The restrictions on gifts also apply to gifts made by attorneys acting under unregistered EPAs, if the person still has capacity to make decisions and has agreed to the attorney using the EPA. You would be breaking your authority if you acted against the wishes of a donor with mental capacity.

Attorneys must also follow any restrictions or conditions set out in the EPA or LPA about gifts. Note that the person who made the EPA or LPA can only restrict the powers the law gives attorneys – the person cannot expand those powers.

What cannot be given as a gift without court approval?

Gifts that are not customary or reasonable will require an application to the Court of Protection.  The OPG has provided examples of what CANNOT be given as a gift and will need court approval by way of an application to court:

• Making a loan from P’s funds
• Making a large gift
• Creating a trust over P’s property
• Living rent free in a property owned by P
• Selling a property for less than its value or transferring property into another name
• Changing a Will by a deed of variation
• Maintaining and supporting another person eg. paying for school fees
• Removing cash assets to reduce the size of P’s estate

Checking if someone can make gift decisions

Under the Mental Capacity Act 2005, attorneys and deputies must always act in the person’s best interests. They must consider whether the person has the capacity to understand the decision to make a gift and whether they are able to take part in the decision making process.  This should be done in all gifting situations, not just on one occasion.  Generally, the larger the gift, the more detailed your assessment should be.  It is useful to keep a written record of your discussions with the person.

A key principle of the Mental Capacity Act 2005 is that you must assume the individual has capacity until/unless you have established otherwise.  If the individual has the capacity to make gifts, perhaps whilst you are managing their day-to-day finances, that is their right.  When assessing a person’s capacity, consider:

• Does the donor have an impairment of the mind or brain?                            
• If so, does that impairment or disturbance mean that they are unable to make the particular decision at the time it needs to be made? You assess this by asking whether the donor can:
  -    Understand the information relevant to the decision
  -    Retain that information in their mind
  -    Use or weigh that information as part of the decision-making process, or
  -    Communicate their decision  

The person’s Will

Before making any gifts, it is essential to consider whether the person has made any wills in the past. Reviewing the will can provide valuable insight into their intentions and wishes regarding the distribution of their estate.  Gifting in a manner that contradicts the provisions of the will could potentially lead to disputes or legal challenges after the individual’s death.   Therefore, attorneys and deputies should ensure that any gifts align closely as possible with the individual’s documented wishes unless there is a reason to deviate from this. Taking the will into account does not mean however, that you can gift the person’s assets in the way the will says during their lifetime.

Warning! Think twice before gifting

Be extremely careful of gifting the person’s assets where they need, (or are likely to need) care which could impact their ability to pay future care fees.  If the person needs financial support from the local authority, they may find that you have purposefully deprived the person of their assets and you (or the person that received the gift) may be asked to pay them back!

This could also result in legal action being taken against the attorney or deputy, including removal from their role or personal liability for any financial losses incurred and in extreme circumstances a criminal conviction.

The Golden Rule

Managing gifts as an attorney or deputy is a delicate balancing act that demands careful consideration of both past wishes and present circumstances. By meticulously following legal guidelines, reviewing existing wills, and carefully weighing ethical considerations, attorneys and deputies can fulfill their vital responsibility: safeguarding the best interests of those entrusted to their care. This role requires not just attention to detail, but a deep commitment to preserving both the financial security and personal dignity of the individual they represent.

The full guidance can be found here https://www.gov.uk/government/publications/giving-gifts  however, if you still have questions about making a gift or are unsure about your role as a deputy or attorney, please contact Marie O’Malley on 01926 354704.