With Christmas almost upon us, our thoughts naturally turn to gifting. This can often be a tricky area for lay Deputies who have been appointed by the Court of Protection to look after those who have lost capacity (P). If you are a Deputy, unless the Deputyship Order makes provision to make what we traditionally view as gifts, then you should refrain from doing so.
The definition of a gift, made on behalf of P, is wider than many people would think and can include:
- an interest free loan from the person’s funds without charging interest
- selling a property at an undervalue
- placing a person’s property into trust
- changing a person’s entitlement under a Will by using a Deed of Variation
However, it isn’t only high value gifts that can lead to questions of abuse of trust. Firstly, you should consider whether the person you act for (P) has the capacity to make that gift themselves or, if at all possible, to involve them in the gifting decision, before you start looking at your powers to make a gift.
As a Deputy you need to be mindful that your role is restricted to making decisions only where P lacks capacity to do so and where P does not, that their wishes and feelings about making the gift are taken into consideration. Having a financial Deputy does not mean that P cannot make any decisions at all.
So, what sort of gifting might be considered reasonable? Occasions such as birthdays, weddings or civil partnerships and Christmas are examples of when P might have gifted to those close to them, as part of their normal daily life. Gifts to charity, if P had a habit of charitable giving, could also be considered as reasonable, provided the value takes into account the size of P’s estate, current and future financial situation. Central to all decisions the Deputy makes, P’s best interests must always be foremost.
Sometimes it will be prudent to ask the Court for approval, by way of a gifting application. The process takes into consideration the past and present wishes/ feelings of P, their beliefs, and values if still evident, and any other factors such as advantages realised through gifting such as future inheritance tax savings that P might have considered had they been able to.
A not very festive reminder to Deputies is that if you get this wrong you might be asked to apply to the Court for retrospective consent, told to return the gifts, be removed as Deputy, or even suffer financial consequences related to the wrongful gifting.
A Deputy should always keep a record of any gift, and reasoning behind it and, if the gift is substantial. further advice sought. For professional advice relating to Deputyship concerns, including gifting at Christmas, please contact our specialist team, 0800 84 94 101.