Attorneys under a Lasting Power of Attorney have very limited authority to make gifts. Understanding the rules is essential — getting it wrong can constitute financial abuse.
An attorney can only make gifts in limited circumstances — customary occasion gifts (birthdays, Christmas) and charitable donations consistent with the donor's wishes. All other gifts, including IHT planning gifts and gifts to the attorney themselves, require Court of Protection approval. Unauthorised gifts can constitute financial abuse.
Under section 12 of the Mental Capacity Act 2005, attorneys can make the following types of gifts without Court of Protection approval.
Gifts on customary occasions — birthdays, Christmas, weddings, anniversaries — to people connected with the donor (family, friends) or to charities the donor supported.
Donations to charities that the donor has previously supported or expressed a wish to support.
Continuing small regular gifts that the donor was making before losing capacity — for example, regular payments to grandchildren or standing orders to charities.
These types of gifts are outside the attorney's standard authority and require a formal Court of Protection order before they can be made.
Significant gifts to the attorney themselves, their family, or other beneficiaries — even if the donor would have wanted this — require Court of Protection approval.
Using the annual IHT exemption (£3,000), making gifts out of surplus income, or making potentially exempt transfers (PETs) to reduce the estate all require Court of Protection authorisation.
An attorney cannot make gifts to themselves under any circumstances without Court of Protection approval. This is a fundamental safeguard against financial abuse.
Any gift that would significantly reduce the estate or affect the donor's ability to meet their own care costs requires Court of Protection approval.
If you need to make a gift that is outside your standard authority as attorney, you must apply to the Court of Protection. Here is the process.
Document the proposed gift clearly — who it is to, the amount or asset, and the reason it is in the donor's best interests.
The attorney must be able to demonstrate that the gift is in the donor's best interests — not just convenient for the family or beneficial for tax purposes.
A formal application (COP1) must be made to the Court of Protection. The application must explain the proposed gift and why it is appropriate.
The donor, other attorneys, and relevant family members must usually be notified of the application and given the opportunity to object.
The Court of Protection will consider the application and, if satisfied, issue an order authorising the gift. Only then can the attorney proceed.
Making unauthorised gifts under an LPA is a serious matter. The Office of the Public Guardian (OPG) investigates complaints about attorneys and can apply to the Court of Protection to have an attorney removed. In serious cases, the police may be involved and criminal charges can follow.
If you are concerned that an attorney is making unauthorised gifts or otherwise misusing an LPA, contact the OPG on 0300 456 0300 or speak to a solicitor immediately.