Can You Give Gifts on Someone's Behalf Under a Lasting Power of Attorney?

Christmas shopping can become unexpectedly complicated when you are looking after a parent's money.

Perhaps your mother has always given her grandchildren a present at Christmas. Maybe she has made a donation to the same charity every year. If you now manage her finances under a Lasting Power of Attorney, it is understandable that you may want those traditions to continue.

Some gifts may be allowed, but an attorney's authority is limited.

This article concerns property and financial affairs Lasting Powers of Attorney in England and Wales.

If the person can still decide for themselves

Having a Lasting Power of Attorney does not automatically mean the person who made it has lost the ability to make decisions.

Capacity is decision-specific. Someone may still be able to decide whether they want to give a modest birthday or Christmas present, even if they need help managing more complicated financial matters.

Where the person has capacity to make the decision, they should normally be supported to do so themselves.

If you are making the gift using your authority as attorney, the legal limits on your powers still apply.

What gifts can an attorney make?

The law allows attorneys to make certain gifts on customary occasions to people who are related to or connected with the person who made the LPA.

This can include occasions such as:

• birthdays
• weddings
• Christmas
• other occasions where gifts would usually be given

Attorneys may also be able to make gifts to charities the person supported, or might reasonably have been expected to support.

However, the value of the gift must be reasonable in all the circumstances.

That means there is no single amount that is automatically acceptable for everyone.

What does 'reasonable' actually mean?

A gift that is affordable for one person may not be appropriate for another.

You need to consider the person's overall financial position, including their income, savings, regular expenditure and likely future needs.

For example, continuing a tradition of giving grandchildren modest Christmas presents may be entirely different from giving a family member a substantial contribution towards a house deposit.

You should also look at the overall effect of several gifts rather than considering each one in isolation.

The person's own financial security must remain the priority.

What if the attorney is also receiving the gift?

Being related to the person does not automatically prevent an attorney from receiving a permitted gift.

However, extra care is needed if you are making a payment to yourself.

As an attorney, you must act in the other person's best interests and must not use your position for your own benefit.

If there is any doubt about whether a proposed gift is appropriate, it is sensible to obtain advice before making it.

What about the £3,000 Inheritance Tax allowance?

This is an area where confusion can easily arise.

The £3,000 annual gift exemption for Inheritance Tax does not mean an attorney can automatically give away £3,000 of someone else's money each year.

The tax rules and the attorney's legal authority are two separate issues.

A gift might fall within an Inheritance Tax exemption but still be outside the powers available to an attorney under a Lasting Power of Attorney.

Equally, family members agreeing that a gift should be made does not expand the attorney's authority.

Can you give someone their inheritance early?

A person's Will may provide useful background about their wishes, but it does not allow an attorney to distribute their estate while they are still alive.

Money or property left to somebody under a Will remains the person's during their lifetime.

An attorney cannot simply decide to give a beneficiary part of their inheritance early because they expect them to receive it eventually.

When might Court of Protection approval be needed?

If a proposed gift falls outside the attorney's authority, approval from the Court of Protection may be required before the gift is made.

This can become relevant where larger sums are involved, where the gift is unusual, or where the transaction benefits the attorney personally.

It is important not to assume that a history of generous gifting or a large estate automatically makes a substantial gift acceptable.

The circumstances need to be considered carefully.

Keep a record of what you decide

If you make gifts as an attorney, keep proper records.

That should include:

• who received the gift
• the amount
• the date
• the occasion
• why you considered it appropriate
• what you know about the person's wishes
• how you decided it was affordable

Keeping clear records can be important if questions are raised later.

If a payment has already been made and you are unsure whether it was permitted, it is better to seek advice than ignore the issue.

At SLS Wills and More, we help clients understand Lasting Powers of Attorney and the responsibilities that come with them. If you are unsure whether a proposed gift is within your authority, it is sensible to take advice before making it.

This article provides general information about the law in England and Wales. Advice on a particular gift will depend on the wording of the LPA and the individual circumstances.