“Trick or Treat?”: What Counts As A Legitimate Gift Under The Mental Capacity Act 2005

From now until 31st October, we will be sharing insights into the complexities and challenges of our work, highlighting how legal expertise, empathy, and collaboration come together in this vital area of law.

Stay tuned as we bring a thoughtful, themed perspective to the season!

Today’s article highlights the importance of understanding what counts as a legitimate gift and the restrictions on Attorneys/Deputies making these gifts on an individual’s behalf.

What is a gift under the Mental Capacity Act 2005?

 A gift under the Mental Capacity Act 2005 is defined as a transfer of ownership of money, property or possessions from the person whose Property and Affairs are being managed. This includes gifts made to themselves or to other people.

Who might receive these gifts from the individual?

• Family or friends– gifts could be made to people connected to the person. For example, family or close friends, for birthdays or Christmas.
• Charities– Small donations to charities that the individual previously supported in their lifetime.

Key criteria for legitimate gifts:  

These gifts must be

• Reasonable in size and nature
• Affordable and proportionate, ensuring they do not compromise the individual’s financial security
• Clearly in the individual’s best interest.

Is court approval required for Deputies/Attorneys to make gifts?

Deputies and Attorneys may make small, customary gifts without seeking approval from the Court of Protection. These include:

• Birthdays, weddings or religious celebration gift
• Charitable donations in line with individuals past giving habits.
• Maintenance payments to a spouse/family member

All gifts must be reasonable and proportionate considering the individuals assets.

But they must seek court approval if the gift:

• Falls outside of the scope of the Power of Attorney or Deputyship Order
• Involves a loan, large gift, property transfer or sale below market value
• Presents a potential conflict or interest
• Is made to a charity with evidence of prior donations by the individual. See case Re Acc (2020) where the Deputy made regular charitable donations. The court refused these gifts to be made due to these gifts not being proportionate and affordable for the client.

Can you get the Courts permission after making the gift?

You need the courts permission before making any gift that is not customary.

In the case of Re HC (2015) the deputy retrospectively applied for the courts approval to make gifts to family member. The court refused to approve the gifts, stating the importance that deputies must not make large gifts unless explicitly authorised.

So, what are the risks of unauthorised gifting?

Making gifts without proper authority can lead to serious consequences:

• The local authority may decide that the individual still has those assets for care funding purposes. Also known as deliberate deprivation of assets.
• Legal repercussions, including reversal of transactions and possible removal of the Deputy or Attorney.

In summary Deputies and Attorneys can make limited gifts on behalf of an individual. Our specialist Court of Protection team here at Wilson Browne Solicitors are here to guide you through the gifting process.

Whether you are seeking advice or need to make a formal application, we are ready to support you every step of the way. We can be all the help you need this Halloween!