Looking after someone else’s financial affairs as an attorney is a serious obligation. Giving gifts on behalf of the donor can help preserve relationships and ensure the wishes of the donor are honoured. Many attorneys are unsure about giving gifts, including whether they are allowed to give gifts at all, how large a gift they can give, and what legally constitutes a gift.Whether you are a person thinking of setting up a power of attorney or have been named as an attorney for someone else, then keep on reading. Here Graysons’ team of power of attorney solicitors in Sheffield and Chesterfield answer some of the most frequently asked questions about giving gifts under a power of attorney including what an attorney’s legal rights and responsibilities are.
Last updated on December 20th, 2023 at 12:58 pm
What is a power of attorney?
A power of attorney is a legal document in which you give authority to someone else (known as an attorney or agent) to manage your affairs on your behalf should you no longer be able to do so. You may no longer be able to manage your affairs, for example, because of health conditions such as Dementia, Alzheimer’s, or a stroke.
When you set up a power of attorney, you can choose who your agent or attorney is, and you can select more than one person to act on your behalf. You should choose a trusted individual or individuals, such as a family member or close friend, who you are confident will have your best interests in mind when acting on your behalf. Alternatively, you could appoint a professional attorney. Many people opt to put a power of attorney in place when they write their will, giving them peace of mind that a trusted family member or friend or professional will manage their affairs on their behalf.
If you lose the mental capacity to manage your affairs and do not have a power of attorney in place, then your loved ones will have to apply for appointment through the courts.
There are two types of powers of attorney – a health care power of attorney and a property and financial affairs power of attorney. The two different powers of attorney give your appointed agents or attorneys different responsibilities and authority. For example, a property and financial affairs power of attorney gives an agent the authority to make limited monetary gifts on behalf of the donor. In contrast, a health care power of attorney only allows for decisions to be made regarding the donor’s health and welfare. You cannot make monetary gifts if you have only been granted a health and welfare power of attorney.
What can an attorney legally do?
What an attorney can legally do depends on how the power of attorney document is written and the type of power of attorney they have. Broadly speaking, an attorney can:
Health care power of attorney:
- Make decisions about the day-to-day care of the donor, including social activities, diet, and dress
- Consent to medical care and treatment on the donor’s behalf
- Manage care in the community for the donor and liaise with providers
- Handle the personal correspondence of the donor
- Make decisions about where the donor should live
Property and financial power of attorney:
- Arrange for the payment of the donor’s bills, including utilities
- Manage the donor’s bank accounts and financial investments
- Collect the donor’s pension
- Handle any tax payments
- Make limited monetary gifts on behalf of the donor
Can an attorney gift money to themselves?
Yes, a property and financial power of attorney agent can gift money to themselves. However, any monetary gifts must be made with the best interests of the donor in mind, and the amount should not impact the donor’s finances and ability to afford their ongoing care needs. It’s important to remember that there are strict safeguarding measures around powers of attorney to prevent financial abuse, and an agent must act strictly within the scope of the power of attorney documents. If at any time you are unsure about gifting, you should contact an experienced power of attorney solicitor, such as Graysons’ Sheffield and Chesterfield solicitors.
Can an attorney agent gift money to others?
Yes, a property and financial power of attorney agent can make limited monetary gifts on behalf of the donor to others. However, it’s important to remember that gifts must only be made if it is in the best interests of the donor and should be in line with the donor’s financial needs. So, the cost of the gift should be comfortably affordable and not impact the donor’s day-to-day needs.
If you are a named power of attorney agent and are unsure about gifting money to yourself or others, then you should consult an experienced power of attorney solicitor, such as Graysons’ solicitors in Sheffield and Chesterfield.
What is defined as a reasonable gift?
An agent is free to use their discretion to make gifts for occasions, such as birthdays, graduations, anniversaries, or religious occasions and to include Christmas presents for persons who are closely connected to the donor. The gifts should be of reasonable value in the context of the donor’s finances.
Other gifts that an agent can make include making donations to charities, paying for school fees or university tuition, or giving someone an interest-free loan. Before making these types of gifts, an agent should apply to the Court of Protection to gain approval.
What should I do if I want to give a gift under a power of attorney?
A power of attorney agent should only make a monetary gift on behalf of the donor if the donor lacks the mental capacity to make that decision themselves. Before making a gift, an agent should make every effort to involve the donor in the decision-making process. When making a gift on behalf of a donor, the agent should carefully consider the donor’s views, wishes, and values; the broader thoughts of close family and friends; and whether the donor can afford the proposed gift in the context of the donor’s overall wealth. It is important to keep in mind that any gift should be in keeping with what the donor would have gifted if they had full mental capacity. You should also keep a record of all gifts. The Office of the Public Guardian has the authority to request and investigate any gifts given out by agents. If you are an agent and need advice before making a gift on behalf of a donor, then you should contact an experienced power of attorney solicitor, such as Graysons’ team of Sheffield and Chesterfield solicitors.
Do I have to make monetary gifts as an attorney?
No, you do not have to make monetary gifts under a power of attorney, even if you are named as an agent on a property and financial power of attorney. Agents are free to use their discretion when exercising this power.
How can Graysons’ power of attorney solicitors in Sheffield and Chesterfield help?
Our experienced power of attorney solicitors in Sheffield and Chesterfield can offer expert advice and guidance, whether you are a named power of attorney agent or a potential donor thinking about creating a power of attorney and appointing an agent. For many years, our dedicated team of solicitors in Chesterfield and Sheffield has provided expert legal support to elderly clients, as well as those that care for them. We are members of Solicitors for the Elderly and the Society of Trust and Estate Practitioners. Contact us today if you need any help or guidance regarding a power of attorney.
