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“Gifting” As A Deputy Or Attorney: The Rights & Wrongs

Caroline Philcox

Caroline Philcox

Being a Deputy or Attorney can cause difficulties if you find yourself having to wear different hats: the first as the relative of the incapacitated person and the second as protector of that relative’s assets.

Take for example the situation where your mother loses mental capacity and you act either as her Attorney under an Enduring Power of Attorney or Lasting Power of Attorney or, in the absence of such a document, you have successfully applied to the Court of Protection to act as your mother’s Deputy. You may find yourself having to weigh up your responsibilities to her as her Attorney against what you consider she would have wanted to happen to her assets before she became incapacitated.

Let’s say your daughter needs help towards a deposit on her first flat. She needs £8,000 to make up the shortfall. You don’t have the money and you know your mother would have been the first to help her. But your mother no longer has capacity and the responsibility rests with you. As Attorney, are you allowed to gift that amount in your mother’s name? Will Social Services consider this gift to be a deprivation of assets if your mother needs funding for her care in the future yet no longer has assets of her own to pay for that care?

As Attorney or Deputy, you have a number of duties and you must always act in line with the powers granted to you on the LPA document or Deputy appointment. For example, the LPA form highlights five specific Attorney responsibilities, one of which is “I can spend money to make gifts but only to charities or on customary occasions and for reasonable amounts”.

Many clients tell us that they have heard that as Attorney, they are automatically entitled to make gifts to family members in line with the annual Inheritance Tax allowances, but this is not in fact automatically correct and the incapacitated person’s individual circumstances, needs and finances must be taken in to account. Furthermore, in many cases, a gift must be approved in advance by the Court of Protection.

Senior Judge Lush

Senior Judge Lush

Some clear guidance has now come our way by way of a judgment from the Court of Protection. In Re GM: MJ & JM v Public Guardian [2013], Deputies had made gifts to themselves and other family members and charities totalling around £230,000, about half of the family member’s wealth, without consulting her. One of the Deputies gave themselves £20,000 in cash, an Alexander McQueen designer handbag, a Rolex watch, a ring and gifts to the other Deputy worth more than £48,000. Senior Judge Lush listed the considerations that should be taken into account when a Deputy is making a gift:

  • (i) having regard to the patient’s financial position
  • (ii) the extent to which the patient was in the habit of making gifts of a particular size or nature; &
  • (iii) the possibility that the patient may require future residential or nursing care, among others

Senior Judge Lush was unequivocal in his condemnation of their actions and stripped them of their Deputyships:

“The applicants … have applied to the court for the retrospective approval of a number of gifts they have made from GM’s funds to themselves, their families, some friends and several charities, and also for the court to agree what they have described as their Deputyship expenses. … I have no hesitation in revoking their appointment as Deputies. GM’s finances are in disarray because of their conduct, and it is in her best interests that someone with experience of cases of unjust enrichment and restitution, such as a panel Deputy, is appointed to manage her affairs in their place.”

The subject of gifting is a complex one, and while this example is an extreme one, what has been confirmed from this judgment is that Attorneys and Deputies cannot gift at whim and at will, but that the best interests of the incapacitated person remain paramount.

About the author

Caroline Philcox

caroline-philcox

  • Thank you for your comment. There isn’t a simple answer to your question of whether as Deputy, gifts to relatives are no longer possible. In general, small gifts may be appropriate but it all depends on the size of a person’s estate and their current care and support needs; as well as potential future care and support needs that are reasonably foreseeable.

    Large gifts such as the ones you mention (£6,000 to 4 people within 2 years), always require Court of Protection permission. This is particularly so considering that it equates to about ¼ of your mum’s total estate.

    There are very strict rules with regard to gifting for Deputies and for Attorneys. Whilst the donor in an LPA for Property & Financial Affairs might have stated that s/he wishes for the Attorneys to make certain gifts, the moment the donor loses capacity, the Attorneys must take into consideration Court of Protection guidance, guidance from the Office of the Public Guardian, the Mental Capacity Act 2005 and the law under the Care Act 2014 regarding the paying for care rules. This is to avoid any allegation of a deliberate deprivation of assets to avoid future care costs. Therefore in reality, Attorneys are just as restricted in making gifts as Deputies are.

    We would be happy to review your case in full and provide you with tailored advice regarding your mum’s estate and your role as Deputy if you would like. Please call us on 01273 609911 and we can explain how we work and how we charge.

  • By lynn millar | 20/06/2017 at 09:13

    is it right that by becoming a deputy, any gifts to family – immediate – that my mother would have made when she had capacity, are not longer a possibility? this seems very unreasonable simply because it is deputyship and not LPA. my mother has a small estate and i had put my gifting intentions into my court application. the application was granted with no information sent to me to suggest i could not gift as noted. however, mymothers total estate of 114,00 saw me gift only once to those family members noted (4) a total of 2 years gifting amounting to £24,000, with a clear note of this being the only gifting – and the evidence my mother had behaved in a similalry generous way before losing capacity.
    the court of protection told me i cannot gift in excess of 250 per person per year in total, and any questions i ask appear to suggest that, by becoming a deputy, i cannot do this. if we follow what is ‘in the best interests of my mother’ then we leave only what may pay for continued care – as the court of protection (a government body) would see this as the main focus. however surely there is an argument that it is also in my mothers interests to continue the practices she did before losing capacity? after all this is about my mother and not how we pay for the care system, is it not?
    there is nothing on the deputy paperwork that indicates the total loss of these rights for someone, and i would argue it is misleading, if this is the case, that you are allowed to fill in, and asked about, gifting in a deputy applicaiton when you then discover you actually can’t do this! i am the only person in my mothers will, and the only surviving immediate family member.
    i have struggled to get clear and accurate information on my rights as deputy and my mothers rights as the estate owner, with the court of protection being incredibly defensive when challenged about this.

  • By Cate Searle | 14/02/2014 at 14:24

    Thank you for your query about the difficult situation that your wife as Deputy is facing in relation to her sister’s financial mismanagement and potential financial abuse. There are legal steps that a Deputy can take; we will send a private email to you to answer your query.

  • I am writing on behalf of my wife, who has Multiple Sclerosis and is disabled. We live in Surrey. My wife has Letters of administration for her late Father, he died intestate.
    Also my wife is Deputy for her mother who lives in a care home. Before my wife obtained these court orders, her sister controlled the parents finances. My wife looked at the bank statements, possible money mismanagement by her sister who refuses to discuss matters. Each parent £20,000 approx. No care home fees, paid from their pension. Can my wife legally challenge her sister to supply a full account of the monies being used to benefit the parents only. Many thanks. Gerard


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