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I have Lasting Power of Attorney (LPA) for someone, can I make gifts on their behalf?

View profile for James Chalkley
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Chances are, if you are reading this, you already know a little bit about LPAs. However, let's have a recap on what they are:

  • An individual can put an LPA in place so that their appointed person(s) can make decisions on their behalf when they no longer have the capacity to do so themselves.
  • There are two types of LPA;
    • One for property and financial affairs, and
    • One for health and care decisions.
  • The person that puts the LPA in place is the 'donor'.
  • The person appointed to act on behalf of the donor is the 'attorney'.

OK, now that we are up to speed let's imagine that we are the attorney under a financial LPA, in a situation where the donor has lost capacity, and we are thinking of making a gift to a relative of the donor, on the donor's behalf because it's Christmas and that's what they have always done.

Whilst acting under either type of LPA, attorneys must always act in the best interests of the donor and if the donor still has capacity then all decisions must be made by them and not by their attorneys.  If the donor has fluctuating capacity, then the attorneys will want to consult them at the best possible time and make sure they understand the request.

If it is established that the donor does not have the requisite capacity to make the decision then when considering any expenditure in the form of a gift, the attorneys must consider the size of the gift relative to the Estate, previous gifts given, current financial position and the likely future financial position.

It is best to check, before making any gifts, whether the donor has included any specific provisions in the LPA which instruct the attorneys regarding gifts.

If the LPA does not have any such provisions, the Mental Capacity Act 2005, section 12(2) states that gifts can only be made on customary occasions such as birthdays or weddings and Christmas but only to people related or connected to the donor. The attorney may also make gifts to charities.

For gifts that fall outside of LPA provisions or the legislation mentioned above, you must apply to the Court of Protection for permission.

If you would like to discuss putting LPAs in place or are an attorney acting for someone under an LPA and have questions, please contact the Private Client team for helpful advice. They can be reached on 01245 228125 or PrivateClientEnq@gepp.co.uk.

This is not legal advice; it is intended to provide information of general interest about current legal issues.