Week 3 of our look at the OPG’s Guidance (PN7) for Attorneys and Deputies making gifts on behalf of the Donor of the LPA/EPA or Deputyship Order.
Applying to the court of protection
If Attorneys wish to make a gift but lack authority under the power of attorney, or in the general exceptions, they must to apply to the Court, subject to minor exceptions. If the gift is minor, it may not justify the court application.
In MJ and JM and the Public Guardian in 2013, Senior Judge Lush said the exceptions cover the annual inheritance tax exemption of £3000 and small gifts exemption of £250 per person when-
- The Donor has a life expectancy of less than five years
- The estate is taxable for Inheritance Tax – IHT- (currently over £325,000)
- The gifts are affordable, taking into account care costs, and won’t adversely affect their care/quality of life
- There is no evidence that the donor would be opposed to those gifts being made
These exemption do not allow an attorney to carry out IHT planning. They must obtain permission from the Court.
Gifts of property
Any gift of property such as land or a house is almost certainly outside of the powers of attorney. The attorney would have to apply to the Court for permission.
The gifting of low value personal possessions or furniture to family members, eg when clearing the donor’s home should be permissible.
Attorney accepting gifts to themselves
This is a conflict of interest. Attorneys must not take advantage of their position to benefit themselves. If they accept a gift, the Court can look at the Donor’s capacity and whether the attorney went beyond their authority.
Providing for others’ needs
Most deputyship orders potentially allow a deputy to look after the needs of anyone related or dependant on the Donor. EPAs allow attorneys to benefit themselves or others if the Donor might have provided for those needs.
LPAs are slightly more restricted but the Court has confirmed an LPA may provide for family members if the Donor is obliged to maintain them – for example, in the case of the Donor’s husband, wife, or dependent child. This may include the attorney themselves, if they are dependent.
The Attorney should apply to the Court if there is any doubt.
Click here for part 4