Something that is often overlooked by attorneys acting under a Property and Financial Affairs Lasting Power of Attorney (LPA), when the person they are acting for (the Donor) has lost capacity, is their limited ability to make gifts on the Donor’s behalf.
In making gifts, attorneys must always act in the best interests of the person they are acting for and they must first check whether there are any restrictions on gifts in the LPA.
Subject to that, they can make gifts as follows:
- To people, including themselves, who are related to or connected with the Donor on “customary occasions”. Customary occasions are a birth, or a birthday, a marriage or the formation of a civil partnership, or any other occasion when presents are usually given within families or among friends or associates.
- To any charity to which the Donor made, or might have been expected to make, gifts. (This does not include a payment to a political party.)
In either case, the value of the gift must not be unreasonable taking into account all the circumstances, in particular the size of the Donor’s estate.
The Donor can make larger gifts himself if he has the capacity to do so. If the Attorney wishes to make gifts which are beyond their authority e.g. for Inheritance Tax planning purposes, they must make an application to the Court of Protection for an Order authorising the proposed gifts. Attorneys should seek legal advice if they are unclear on their powers and what they are authorised to do, otherwise they may be open to challenge.
If you need any further advice on making gifts under an LPA, please contact one of our Solicitors below. You can also find our guidance notes on Powers of Attorney here.
Antonia Cooper on 01604 463314 or click here to email Antonia.
Chloe Harbutt on 01223 461155 or click here to email Chloe.