Can a deputy under a Court of Protection order give gifts?

by | Feb 22, 2016 | Blog Posts

The answer is generally no, however the first thing to look at is the order from the Court of Protection itself; the order grants specific powers to the deputy which may include a general power to give small gifts, i.e. up to £1,000 per year.  However, deputies can apply to the Court of Protection for specific orders. There has been much case law surrounding this issue and the value of any gifts.

Re Joan Treadwell (deceased) (2013)

P’s income was £10,000 a year but the joint deputies had made gifts totalling £59,000 over 3 years. The Judge held that with an income of £10,000 per year, anything over £100 for a christening or graduation gift, or £50 for a housewarming gift would not be reasonable and that the order (in its usual form) authorised gifts of no more than about £1,000 per annum, above which permission (or in this case ratification) was required. The joint deputies were required to repay all but £15,000 of the gifts.

In the matter of GM, MJ and JM and the Public Guardian, no. 11843118 (2013)

The deputies were two nieces (by her marriage) of the GM. GM was 92 years old and no longer had capacity, she did not have a will and the beneficiaries to her estate after death would have been her brother’s issue who she did not have any contact with.  GM’s only daughter died leaving GM the entire estate (£300,000). Gm also had assets of her own worth just under £200,000.
The deputies made various gifts to themselves, their family, a third party who was friends with GM’s deceased daughter and various charities. The gifts totalled £231,259.50 which the deputies subsequently sought retrospective approval of together with expenses of £46,552.24.
The Judge found that:

  1. The small gifts to the third party friend (£2,500) was acceptable and should be approved. It was understandable that the deputies would want to make small gifts to individuals they felt GM’s daughter would have wanted to acknowledge.
  2. Further to the case of re Buckley: the Public Guardian v C [2013], there should be exceptions for the usual IHT exemptions of £3,000 per year and the annual small gifts exemption of up to £250 per year for up to 10 people in the following circumstances:
    1. Where P has a life expectancy of less than 5 years
    2. Their estate exceeds the nil rate band for IHT purposes
    3. The gifts are affordable having regard to P’s care costs and will not adversely affect P’s standard of care and quality of life; and
    4. There is no evidence that P would be opposed to gifts of this magnitude being made on their behalf.
  3. The deputies were held to be personable liable to the estate for £204,459.74 which they must pay back.

 It is clear that there was much emphasis on what GM would have wanted, now and how she acted in the past. They reviewed her financial history to see if she had ever supported any charities, asked her opinion on charities, whether she would be willing to transfer large sums to her relatives etc. It seems that there needs to be a balancing exercise between P’s needs and any gifts.
It is evident that the Courts are treating gifts by deputies very strictly and we would warn deputies to avoid gifts unless approved by the Court.
If you would like to discuss your duties as an executor, please call our specialist Wills, Probate & Trusts team in Leeds, Wakefield and London on 0113 244 9931 or online by clicking here.

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