As an attorney or deputy, you hold a significant responsibility when managing the financial affairs of vulnerable individuals. One area that requires careful consideration is the issue of making a gift as an attorney or deputy. Whether it’s making a donation to a charity, giving a birthday present, or providing financial support to a family member, gifting must be approached with an understanding of the relevant legal and ethical framework.
| Understanding the role of an attorney or deputy
An attorney or deputy is appointed to manage the financial and personal affairs of someone who lacks the mental capacity to do so themselves. This appointment could be under a Lasting Power of Attorney, or by the Court of Protection through a deputyship order. The primary duty is to act in the best interests of the person you are representing, adhering to the principles laid out in the Mental Capacity Act 2005 (MCA) and within the deputy guidelines.
| The legal framework surrounding gifting
Under the MCA, attorneys and deputies must act with due care and diligence. The law does permit some level of gifting. However, it is strictly regulated to ensure that the interests of the vulnerable person who lacks capacity are safeguarded.
1. Statutory authority for gifting: S12 MCA outlines that attorneys and deputies can make gifts on “customary occasions” such as birthdays, weddings, and anniversaries, or to charities the person who lacks capacity supported in the past. However, these gifts must be reasonable in relation to the size of the person’s estate and must not adversely influence their ability to meet their needs.
2. Court approval: For gifts outside the scope of what is considered “reasonable” or “customary”, approval from the Court of Protection is necessary. This includes significant gifts, transfers of property, or any other transactions that may diminish the estate’s value substantially.
| Practical considerations
When considering gifting, attorneys and deputies should ask themselves several key questions:
- Is this gift in the best interest of the vulnerable individual? The overarching principle is whether the gift aligns with their known wishes and values. If they had capacity, would they make this gift themselves?
- Is the gift proportionate? Even if the gift is for a “customary occasion” (such as birthdays, weddings, and anniversaries) it should be proportionate to the person’s overall financial situation.
- Is there any potential conflict of interest? As an attorney or deputy, it’s crucial to avoid any appearance of self-dealing. Gifts to yourself, your family, or other close associates require particular scrutiny and may need court approval to avoid a conflict of interest.
- Has the individual made a will? Before making any gifts, it is essential to consider whether the person has made any will in the past. Reviewing the will can provide valuable insight into their intentions and wishes regarding the distribution of their estate. Gifting in a manner that contradicts the provisions of the will could potentially lead to disputes or legal challenges after the individual’s death. Therefore, attorneys and deputies should ensure that any gifts align as closely as possible with the individual’s documented wishes, unless there is a reason to deviate from this.
| Steps to take before making a gift
1. Document the decision-making process: Keep detailed records of the rationale behind making the gift. This should include the person’s financial status, their past gifting habits, any wills they have made, and the consideration of their best interests.
2. Consult with family and other interested parties: In some cases, it may be appropriate to consult with the individual’s family or close friends to gain insight into the person’s wishes or to avoid disputes.
3. Seek professional advice: If in doubt, seek legal advice or approach the Court of Protection for clarification or approval. This is particularly important when considering gifts that are substantial, could be perceived as controversial, or may conflict with the individual’s wishes in their Will.
| Potential consequences of gifting
Unauthorised or inappropriate gifting can have serious consequences and negatively influencing the vulnerable individual. It could lead to the depletion of the individual’s assets, which may impact their ability to pay for future care. Furthermore, it could result in legal action against the attorney or deputy, including potential removal from their role or personal liability for any financial losses incurred.
Gifting as an attorney or deputy requires a careful balance between the individual’s past wishes and their current and future needs. By adhering to the legal framework, considering any existing wills, and reflecting on the ethical implications, attorneys and deputies can ensure that their decisions serve the best interests of the person they are trusted to protect.
If in doubt, it is best to seek specialist legal advice. Call our team on 0800 988 7756 or contact us on our form.
