What gifts can appointed attorneys make under an LPA?

If you have been appointed as an attorney for a loved one or friend, you can sometimes give gifts on behalf of that person should they no longer have the capacity to do so. Unfortunately, if you have been appointed to only make health and welfare decisions for the person, you Will not be able to give gifts, as you Will need to be appointed as an attorney for their property and financial affairs. 

It is worth knowing that even those who are appointed as an attorney of a Property and Financial Affairs Lasting Power of Attorney (LPA) do not have an unlimited ability to make gifts, as this is heavily restricted by section 12 of the Mental Capacity Act 2005. 

With the above in mind, we’ve created this helpful guide to help you understand what powers you have to make gifts as an attorney, what restrictions you may face as an attorney and also the restrictions that need to be followed under the LPA.

What gifting rights do powers of attorneys have?

Unless the donor has included specific instructions as part of making their LPA, attorneys of a Property and Financial Affairs Lasting Power of Attorney have the power to make the following gifts:

• Donating/gifting to a charity that the donor may have given to if they had mental capacity
• Gifts to family and friends of the donor on customary occasions such as births, birthdays, weddings, religious holidays such as Christmas

If you are the acting attorney, you must always remember that the gift being made must be reasonable in regards to the current size of the donor's estate but also future needs. For instance, if the donor used to make extravagant or generous gifts, but their estate has now been reduced due to care home fees then making gifts of this size on their behalf now would not be reasonable. 

It is recommended that you keep a list of any gifts that you make in case the OPG (Office of the Public Guardian) request or challenge any gifts made.

Restrictions that the donor can make on gift giving powers

When a Property and Financial Affairs LPA is made, the donor has the ability to include instructions that may restrict the attorneys’ power around gift giving but also state the types of gifts the attorneys can make. Below are some common instructions that are included in LPAs we create for our clients:

• The attorneys must make no gifts
• Gifts can only be made to certain family members such as grandchildren
• Gifts are only to be given on certain occasions - birthdays, weddings, anniversaries or religious holidays

What gifts can’t the attorneys make?

Appointed attorneys Will not have the power to:

• Make gifts into a trust fund
• Make gifts to charities or organisations that the donor had no connection with
• Make gifts to people that the donor had no connection with
• Make interest-free loans
• Make gifts to avoid contributing to the donor’s care fees – this is also known as deliberate deprivation
• Make gifts to reduce the size of the donor’s estate for inheritance tax (IHT) purposes

If you’re the attorney for someone who has lost the mental capacity to make their own decisions in regard to gift giving and you wish to make a gift beyond the authority of the LPA, you Will need to apply to the Court of Protection for consideration and approval.

Ready to make your own LPA or need advice as an appointed attorney?

Setting up a power of attorney is the perfect way to protect your future self against the dangers of losing the mental capacity to make your own informed decisions, which is why it’s so important to arrange it while you’re still of sound mind. 

To get started on your power of attorney, register with us here at Wills Services with a few simple personal details.

Or, if you’re looking for more information on what type of power of attorney you should choose or need professional advice as an attorney, simply fill out our short contact form and we Will be in touch at a time that suits you.

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