New guidance for Attorneys around gift giving

The Office of the Public Guardian (OPG) has issued updated guidance on gifting for both deputies and attorneys on behalf of someone unable to manage their own affairs.  The OPG’s role is to ‘carry out the legal functions of the Mental Capacity Act 2005 (MCA 2005).

Gifts can help to preserve the relationships with the family and friends of the person whose finances you are helping to look after. However, both deputies and attorneys must follow stricter protocols when giving gifts on behalf of P. The gifts must be influenced by the past habits of the donor/protected party and be reasonable to the size of their estate and need to comply with the MCA 2005. This means that approval must be sought from the Court of Protection when making gifts, with the exception of small customary amounts such as for birthdays, holidays and other similar events.

The Mental Capacity Act 2005 dictates that the attorney or deputy making the gift act in P’s best interests given their wishes, feelings and financial position. It is necessary for a sufficient paper trail to be kept to explain how the decision was arrived at and what factors were taken into account. Deputies and attorneys cannot give the person’s property away as gifts, or spend their money on gifts, to avoid contributing to care home costs. The law calls this ‘deprivation of assets’.

Specifically, the deputy or attorney must consider whether P has:

– The capacity to understand the decision to make a gift.
– Whether P can take part in the decision-making process.
– Whether it is in P’s best interest.
– Whether it considers current and future needs.

What cannot be given as a gift:

– A loan
– Making a large gift
– Creating a trust over P’s property
– Living rent free in a property owned by P
– Selling a property for less than its value or transferring property into another name
– Changing a Will by a deed of variation
– Maintaining and support another person
– Removing cash assets to reduce P’s estate (whether making the gift is in P’s best interest; and the current and future needs of P).

The OPG has the authority to take action against deputies or attorneys who go beyond their authority.

The Office of the Public Guardian has information relating to giving gifts on the gov.uk website.  Please refer to this for further information or contact Barker Gotelee if you have any questions or would like to discuss whether an application to the Court of Protection would be appropriate.