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Acting as an attorney or deputy and making monetary gifts when someone has lost mental capacity
Janine Guthrie examines gifting as a deputy or attorney when someone has lost capacity.
When can you make gifts if you have been appointed as an attorney or deputy?
Generally, deputies and attorneys must not make gifts from an incapacitated person’s assets without approval from the Court of Protection but there are some exceptions. These are gifts that are given on customary occasions such as Birthdays, Weddings, Anniversaries and Christmas or other religious festivals. The gift should not be more than he or she would normally give and it should be clear that there is a proven history of such gifts. Any gift made should be properly recorded. Anything other than a customary occasion gift will need the permission of the Court of Protection. If you are at all unsure, you should seek legal advice as making a gift that would be deemed to be unreasonable could mean that you are breaking the law.
What type of gifts can the Court of Protection authorise?
The Court can authorise gifts such as money, possessions, charitable gifts, school or university fees, authorising and paying for rent-free accommodation, selling the incapacitated person’s home for below market rate, giving an interest-free loan and gifts from inheritance tax planning
Who can receive a gift?
This can be to a friend, family member or acquaintance of the person who is the subject of a Deputyship order or Lasting Power of Attorney or to a charity.
It is often the case that the person receiving the gift will be a beneficiary under the incapacitated person’s Will (or would be a beneficiary where there was no Will under the rules of intestacy). Notice must be given to the incapacitated person’s close relatives and anyone who might be affected by the gift being made.
If I am the deputy or attorney, can I make the gift to myself?
Deputies and Attorneys should exercise caution if they are contemplating making a gift over to themselves from the incapacitated person’s assets. It is important that Deputies and Attorneys do not breach their fiduciary duty or take advantage of the position to which they have been appointed and should always seek legal advice should they be in any doubt.
What does the Court need to know?
The Court will need to know:
- The nature and value of the gift
- Who the gift is for
- Your reasons for making the gift
- The financial position of the person you are acting as Deputy or Attorney for
- The current health of the subject of the Deputyship or Lasting Power of Attorney
What will the Court consider?
The Court would consider the impact of the gift on the person’s financial situation. They will consider not only their current and future income, assets, capital and savings but also their present and future needs. The Court will also look at their usual spending and future spending and whether making the gift would affect that.
Will I need to go to Court?
Depending on the circumstances, you may need to attend a hearing to justify the need for the gift before permission can be granted.
When would the Court grant the Order?
Generally, the Court must be satisfied that, after the gift has been made, that there is sufficient capital and income for the incapacitated person to continue to maintain their standard of living for their lifetime.
Who pays for the application?
The general rule on costs where the proceedings concern an incapacitated person’s property and affairs is that the costs of proceedings relating to the property and affairs shall be paid by the incapacitated person or charged to their estate. However, this is always subject to the Court’s discretion.
For all information on our Wills, Trusts and Probate team please click here. To contact Janine directly you can find all her contact details here. You can also get in touch with us by filling in the form in the sidebar of this page, alternatively you can call us on 01453 847200
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