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23rd December 2019

Gift giving and Lasting Powers of Attorney

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If you are acting as an attorney under a Property and Financial Affairs Lasting Power of Attorney, there are strict rules in which you must consider before making a gift. In looking at ‘making a gift’, the rules are a lot wider than you may originally think, but in this article, we shall only be looking at it in terms of Christmas/occasional giving. If you are acting under a Lasting Power of Attorney where the person has capacity, it will be their decision as to whether a gift is made. If you are unsure as to whether they have capacity, a simple test would be to see if they:

• understand all the important information about the gift (what it is, who it’s being given   
   to, its value);
• hold on to that information long enough to make a decision;
• weigh up all the available information to make a decision; and
• communicate their decision

If the person is unable to do one or more of these four things, then they may lack mental capacity to decide about a gift. 

As you will be aware when signing the Lasting Power of Attorney, the Mental Capacity Act confirms that if the person makes an unwise decision or one that you disagree with, it doesn’t necessarily mean they do not have capacity. As with all decisions made when acting under a Lasting Power of Attorney, it must be in the person’s best interests to make the gifts.

If you are still unsure, it would be best to seek medical advice and obtain a capacity assessment. It may be the case that the person’s capacity changes and they need help with decision making when making a gift.

If someone doesn’t have capacity or cannot be helped to make a decision regarding gift giving, the Lasting Power of Attorney has limited authority to make gifts (subject to a restriction in the Lasting Power of Attorney) to a family member, friend or acquaintance of the person, or charity, on an occasion where gift giving is usual such as birthdays, weddings, anniversaries, Christmas, Eid, Diwali, Hanukkah or Chinese new year. The value of any gift must not be unreasonable in the circumstances and, in particular, when considering the size of the person's estate. For larger gifts, an application will need to be made to the Court of Protection. This can be a complicated area of law and I would suggest getting advice from a STEP qualified solicitor if you need further advice about whether you are acting within your powers. All solicitors at Hewitsons are either STEP qualified or STEP students. Please do not hesitate to contact Alexandra Francis, a senior solicitor on 01223 447422 to obtain further advice.


Short summary


With Christmas coming up, if you are acting under a Lasting Power of Attorney, there are a number of considerations to take into account before looking to make gifts on behalf of the person you are acting for.

If you are acting under a Lasting Power of Attorney where the person has capacity, it will be their decision as to whether a gift is made.

Where someone doesn’t have capacity or cannot be helped to make a decision regarding gift giving, the Lasting Power of Attorney has limited authority to make gifts (subject to a restriction in the Lasting Power of Attorney) to a family member, friend or acquaintance of the person, or charity, on an occasion where gift giving is usual such as birthdays, weddings, anniversaries, Christmas, Eid, Diwali, Hanukkah or Chinese new year. The value of any gift must not be unreasonable in the circumstances and, in particular, when considering the size of the person's estate. For larger gifts, an application will need to be made to the Court of Protection. This can be a complicated area of law and if you need further advice about whether you are acting within your powers, please do not hesitate to contact us to obtain further advice.