Christmas is a time for giving, and many of us take joy in selecting thoughtful presents for our loved ones. However, when it comes to individuals acting under a Lasting Power of Attorney (LPA), there are specific rules around gifting that need careful consideration. This article explores what attorneys need to know about making gifts on behalf of the person they represent, ensuring that festive generosity remains within the boundaries of the law.
What is a Lasting Power of Attorney?
An LPA is a legal document allowing an individual (the donor) to appoint one or more people (attorneys) to make decisions on their behalf if they lose mental capacity. There are two types of LPA:
- Property and Financial Affairs LPA – covering decisions about finances and assets.
- Health and Welfare LPA – covering decisions about personal care and medical treatment.
For the purpose of Christmas gifting, the focus is on the Property and Financial Affairs LPA.
The Rules Around Gifting
Under the Mental Capacity Act 2005, attorneys have the authority to manage the donor’s financial affairs but must always act in the donor’s best interests. This principle also applies to making gifts. The law imposes strict limitations to ensure that attorneys do not misuse their position.
- Gifts Must Be Reasonable and Customary
An attorney can make gifts only if they are:
- On a customary occasion (e.g., birthdays, anniversaries, or religious celebrations such as Christmas).
- To people the donor would normally give gifts to, such as family and friends.
The value of the gift must be proportionate to the donor’s financial situation, taking into account their income, savings, and foreseeable expenses. For instance, if the donor has limited funds, large or extravagant gifts may not be appropriate.
- Best Interests of the Donor
Attorneys must consider whether the gift aligns with the donor’s past gifting habits and values. For example:
- Did the donor traditionally give Christmas gifts?
- Were these gifts modest or generous?
- Would the donor still want to give gifts if they had capacity?
When Additional Authority is Required
If an attorney wishes to make a gift outside the scope of the rules—for example, a significant monetary gift or transfer of property—they must apply to the Court of Protection for approval. Acting without court approval in these circumstances could result in legal consequences, including being held personally liable.
Practical Tips for Attorneys at Christmas
To ensure compliance with the law while spreading Christmas cheer, attorneys can follow these guidelines:
- Review the Donor’s Finances: Assess the donor’s financial situation to determine what level of gifting is affordable.
- Stick to the Donor’s Preferences: Reflect on the donor’s past gifting habits and preferences. If in doubt, keep gifts simple and modest.
- Document Decisions: Keep a record of the gifts made, including the recipient, occasion, and reason for the gift. This provides transparency and protects the attorney if questions arise later.
- Seek Advice if Unsure: If you’re uncertain whether a gift is permissible, consult a legal professional or contact the Office of the Public Guardian for guidance.
Examples of Acceptable Gifting
- Yes: A £20 Christmas gift for each grandchild, in line with the donor’s past habits.
- No: A £5,000 contribution toward a family member’s wedding without Court of Protection approval.
A Final Word
Christmas is a time to bring joy, but attorneys must ensure that any gifting decisions are both lawful and in the donor’s best interests. By adhering to the rules, attorneys can help preserve the donor’s wishes and protect their financial security while spreading festive goodwill.
If you have questions about LPAs or need legal advice on acting as an attorney, our expert team at Lewis Denley Solicitors is here to help. Contact us on 01403 456430 or email us at info@lewisdenley.com for tailored advice.
Disclaimer: This article is for general information purposes only and does not constitute legal advice.