Jessica Jarvis

With the festive season just around the corner, gift-giving is on everyone’s mind. For attorneys and deputies, this period brings the important task of ensuring that any gifts given are both thoughtful and legally appropriate.

Attorneys and deputies have the responsibility to make gifting decisions for others, but it’s important to remember that this role comes with clearly defined legal rules. Staying informed and following these guidelines is key to making sure all decisions fall squarely within the scope of what they’re allowed to do.

Gifting encompasses various actions like creating trusts, making interest-free loans, or selling property below market value. It is vital for attorneys and deputies to ensure that their gifting decisions align with the wording of their appointment and the law. Overstepping this authority can lead to investigations, legal action, or other serious consequences.

This article concentrates on standard types of gifts, such as those given during Christmas, providing guidance on how to handle these decisions responsibly.

The Office of the Public Guardian offers detailed guidance for making gifting decisions. This includes:

Choosing Recipients and Occasions: Gifts should be made to family, friends, or charities on occasions where P would have traditionally given gifts, like Christmas, birthdays, or other significant celebrations.

Assessing P’s Past Habits: Reflect on the person’s history of giving. Did they have a tradition of generous gifting, or were they more modest in their approach?

Proportionality and Estate Size: Ensure the gift is proportionate to the person’s overall estate. A large gift from a small estate might not be justifiable.

Future Financial Needs: Consider the impact of the gift on the person’s ability to meet their future financial needs, including potential care costs.

Conflict of Interest: Avoid any conflict of interest, particularly if the attorney or deputy stands to benefit from the gift.

Example Scenario
As Christmas nears, Linda, Joan’s attorney, is considering how best to handle gift-giving for Joan’s grandchildren. Before deciding, Linda reviews the Power of Attorney document to understand the extent of her gifting authority.

She notes that while Joan has always enjoyed gifting generously, her financial circumstances have changed since moving into a care home. With this in mind and confirming that modest gifting is within her powers, Linda opts for thoughtful but affordable gifts that reflect Joan’s loving nature without compromising her financial future.

In addition to the OPG’s guidelines, legal precedents provide a structure for making gifting decisions, particularly the de minimis exceptions. The criteria mirror those set by the OPG but additionally direct that these exceptions are generally permitted if P has a life expectancy of less than 5 years. These exceptions allow for small gifts to be made without needing court approval, under specific conditions:

Annual IHT Exemption: Gifts up to £3,000 annually are generally permissible without impacting the person’s estate significantly.

Small Gifts Allowance: Additional gifts of up to £250 per individual, to a maximum of ten people per year, are also allowed under this rule.

Practical Application: Even in cases where the person’s life expectancy doesn’t strictly align with these criteria, following the structure of these exceptions can help ensure gifts are reasonable and within legal limits.

Example Scenario

With the festive season approaching, James, acting as a deputy for his friend Mark, thinks about maintaining Mark’s tradition of charitable donations. Before proceeding, James carefully examines the court order that appointed him as Mark’s deputy. He confirms that he has the authority to make charitable donations on Mark’s behalf, within reasonable limits.

Given Mark’s ongoing care expenses, James chooses to donate to a few of Mark’s favoured charities, balancing his friend’s philanthropic spirit with the need to manage his finances responsibly.

When making gifting decisions, attorneys and deputies should balance the festive spirit with their legal obligations.

If uncertain about the suitability of a gift or the scope of their authority, consulting the Court of Protection or reaching out to the OPG helpline is recommended to obtain further guidance.