Legal News | 12.03.26
Attorneys and gifting: proceed with caution…
Lasting Powers of Attorney (often referred to as “LPAs”) are important legal documents that can be put in place for the future – many now consider them to be just as essential as Wills. However, rules around the use of LPAs are less well known.
The Office of the Public Guardian (“OPG”) has recently published updated guidance as to when attorneys can make gifts on behalf of a donor (the person who made the LPA). However, it may not even occur to some attorneys to seek out this guidance in the first place; attorneys, often with access to bank accounts, investments and property, may not realise that there are boundaries to their powers, or that gifting is an area to navigate carefully.
When might a gift be appropriate?
Broadly, a gift may be permitted if all the following apply:
- The gift is given on a customary occasion (e.g. birthdays, weddings, Christmas);
- The gift is made to someone related to or connected to the donor, or to a charity the donor supported; and
- The gift is of reasonable value, taking into account all the circumstances, in particular the size of the donor’s estate.
What counts as ‘reasonable’ is for the attorney to consider, taking into account the OPG’s guidance and what is truly in the donor’s best interests. Significantly, as the OPG emphasises in its latest guidance, “a best interests decision is not the same as asking what the person would decide if they had capacity”.
What happens if you get it wrong?
If you, as an attorney, make a gift that is not permitted, this can have serious consequences, including:
- Removal as an attorney (temporarily or permanently);
- Being required to apply to the Court of Protection for retrospective approval;
- Being required to return the gift to the donor’s estate; and
- In some cases, a referral to the police.
If in doubt, an application can be made to the Court of Protection to request formal approval of a gift.
Acting as an attorney is rarely a straightforward task, and the above is just one example of when you might struggle to navigate the role. If you are an attorney and need assistance, please do get in touch with your usual contact at Wansbroughs or by contacting us at wealth@wansbroughs.com
