In January 2018, The Office of the Public Guardian (OPG) updated its legal guidance for professional deputies (appointed by the Court of Protection) and attorneys (appointed under an Enduring Power of Attorney or property and affairs Lasting Power of Attorney) in regard to giving gifts on behalf of the person they act for. The update reflects recent judgments by the Court of Protection (COP).
The gifting practice note also sets out the approach taken by the OPG in the event that a deputy or attorney should go beyond their authority to make the gifts.
What is a gift?
In regard to a deputy or attorney, a gift is described as transferring the ownership of money, property or possessions from the person whose affairs they manage to another (including themselves) without full payment in return.
The General Rule about Gifts
The general rule is that a deputy or attorney should not make gifts from the person’s estate. However, there is an exception in which they may make a gift if it is to a family member, friend or acquaintance of the person on a customary occasion or to a charity the person supported and the gift is not for an unreasonable value.
According to the guidance, any gift or transfer of a property, such as a house or land, is almost certainly outside of the deputy or attorney’s powers. To make such a gift, the deputy or attorney would likely have to apply to the COP for permission.
A person’s executed Will can be taken into account when making a gift, as it is a suggestion of the person’s wishes.
Does the person have mental capacity?
If the person has mental capacity, they should make the decision to make a gift themselves.If the person lacks capacity, the deputy or attorney must still either consult them or encourage them to participate in the decision-making.
Providing for others’ needs
A deputy or attorney may potentially pay for the needs of the person’s relatives or dependents if legally obliged to maintain them.
In the case of The Public Guardian’s Severance Applications (Rev1) [2016] EWHC COP 10 (19 June 2017), the difference between a gift and a payment to meet a person’s needs was considered. It was held that an LPA donor could legitimately require her attorney to meet her disabled daughter’s needs from her estate without seeking authority from the COP, as this was meeting a need rather than making gifts.
What happens if you make unauthorised gifts?
If a deputy or attorney makes gifts beyond their authority and without approval from the COP, the OPG may apply to the Court to have the deputy or attorney removed; suspended temporarily; be required to apply for approval of the retrospective gift or return the gift. The OPG may also refer the matter to the police and can apply to the Court for a deputy’s security bond to be called in.
Veronica Mullins, Partner and Head of Ramsdens Court of Protection team comments: "It is crucial that you appoint people you trust to act as attorneys as they are appointed to manage your affairs should you be unable to do so yourself. There are two types of Lasting Powers of Attorney; one for property and financial affairs and one which deals with health and welfare. Without these safeguards in place, your loved ones could face a lengthy and costly application to the Court of Protection to be appointed as your Deputy."
Veronica is one of only 64 Public Guardian professional court Panel Deputies in England and Wales.
If you would like to discuss putting your legal affairs in order, then please contact our highly experienced Private Client team today. It’s never too soon to protect yourself and your loved ones. Call us on 01484 821 500, text LAW to 67777 or email willsandprobate@ramsdens.co.uk.