The Power of Attorneys to make gifts

Gifts made by attorneys under Lasting Powers of Attorney are restricted by section 12 of the Mental Capacity Act 2005; these extend to making gifts on customary occasions to persons, including the attorney, who are related to, or are connected with, the donor (the person who made the Power of Attorney) or to any charity to whom the donor made, or might be expected to make, gifts.

Where the Lasting Power attempts to extend the ambit of gifts the Court of Protection can sever the relevant provision of the Lasting Power.

That said, an attorney can provide for the needs of others as part of their duty to act in the donor’s best interests, even in the absence of express provision in the Lasting Power.

Similarly, provision to permit the common law duty to maintain a spouse is, thankfully, also allowable.

In a case heard in the Court of Appeal only this month it was ruled that the long-term carer of the composer Malcolm Arnold should not have used his Power of Attorney to give himself a series of large sums from Arnold's bank account. Overturning an earlier High Court judgment by a 2:1 majority verdict, the Court of Appeal ordered Anthony Day to return to Arnold's estate the sum of £36,000 that he took from the bank account.

Any proposed gifts or planning to save tax, or otherwise, need the prior approval of the Court in the form of a Order.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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