You may be a Deputy or Attorney who is managing money on behalf of a person who lacks mental capacity.
In some cases it is clear that the person has more money than they need. This may be the case where the person is very elderly and has a lot of capital, but are you allowed to give away the surplus capital to assist family members or to reduce inheritance tax?
The rules on making gifts are set out in the Mental Capacity Act 2005. You will have to show that the gift is in the best interests of the incapacitated person and line with their wishes and feelings when they had capacity. You should also consult with the person if they are able to understand the issue and communicate a response.
If you are sure that the person cannot make the decision in question, then you as Deputy or Attorney must decide for them.
A key consideration is affordability.
You must consider the age and life expectancy of the person who lacks capacity, their current needs, their likely future needs and the resources they have available to draw upon for the rest of their lives.
You must be sure that the person will have sufficient funds to meet their needs for the rest of their life, based on the longest possible life expectancy and allowing a fund for contingencies.
You should also consider the person’s wishes, views and values.
You can make certain small gifts without the Court of Protection’s approval such as birthday or Christmas presents to a family member or close friend of the person, or donations to charities. The gift must be reasonable given the size of the person’s estate.
If the gift is more substantial, you will need to make an application to the Court of Protection to approve the gift. The court is likely to require detailed financial analysis showing that the gift is affordable. They will also require evidence on the wishes and feelings of the incapacitated person to be satisfied that they would have wanted to make this gift if they still had capacity.
If you make a gift without Court approval, the Office of the Public Guardian might launch an investigation into your role as Deputy or Attorney, issue a warning to you and in the worst case scenario, remove you as Attorney/Deputy.
The Office of the Public Guardian has recently produced a useful guidance note relating to gifts and in what circumstances the Court’s approval is required. However, a Lay Deputy or Attorney may wish to seek professional advice when deciding whether to make a gift, with or without the Court of Protection’s approval.
Our team at Andrew Isaacs Law, have many years’ experience in acting as Professional Deputy and can also provide advice and assistance to family members who are Deputies. Contact us today, to see how we can help you.