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Lasting Power Of Attorney (LPA) And Gifting Rules

Lasting Power of Attorney (LPA) and gifting rules

We are frequently asked about gifting whilst acting as an Attorney of a LPA, as Attorneys strive to do the right thing by the person they have been tasked to look after and to maintain their existing relationships with friends and family. There are some rules and guidelines to be aware of when acting as an Attorney in regard to gifting, but this remains a grey area.

The law states that an Attorney or a Deputy can only make a gift if it is either:

  1. to a family member, friend or acquaintance of the person on a “customary occasion” (birthday, wedding, Christmas, Diwali, Chinese New Year, ); or
  2. to a charity

In both cases, it is essential that the gift is of a reasonable value in relation to the size of the person’s estate and that they are acting in the best interests of the Donor.

Remember, an Attorney or Deputy cannot give the person’s property away as gifts in order to avoid paying care home fees. Attorneys also cannot make gifts as a way of Inheritance Tax planning without the approval of the courts.

One of the duties of an Attorney or Deputy is to keep records of gifts and the situation in which they were given so that they can explain the gifts if necessary.

If in doubt, our advice would be not to make a gift without gaining approval from The Court of Protection. You must then weigh up whether the gift you want to make warrants the lengthy and time-consuming process of approaching the COP in the first place.

Redwood Financial is one of the south’s leading Investments, Pensions, Wills, Trusts & Estate Planning providers and we are dedicated to helping families to grow, protect and enjoy their wealth. With our unrivalled knowledge of Estate Planning, Lasting Powers of Attorney, Probate, Pensions, Savings & Investments, we can advise on any situation. Please call 01489 877 547 or email info@redwoodfinancial.co.uk.

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