Lubbock Fine, 4 December 2019
A recent ruling by the Court of Protection provides new guidance on the permitted powers of attorneys. And, in certain situations, it gives attorneys more scope than previously.
Reducing one’s estate to mitigate inheritance tax is always better done sooner than later. The overriding message for those wishing to undertake significant Inheritance Tax (IHT) planning, including gifts into trust, remains the same. Do it before the donor (the person creating the power of attorney) loses mental capacity..
Looking after the finances of someone who has lost capacity weighs heavily. The recent cases under scrutiny were referred to the COP by the OPG, the body which receives applications to register Lasting Powers of Attorney (LPA) from the public.
Cases under review had contained mandatory instructions to the attorney on how to act. The Court ruled that these conflicted with the key principle of “acting in the best interests” of a donor and therefore should not be binding. The Judge also commented on where an attorney could use the donor’s money to benefit others without the need to obtain approval from the COP. Broadly, these are as follows:
The COP’s ruling means that there’s greater scope for attorneys to provide for the needs of family members without being constrained on the making of gifts. However, this may only be possible if there’s a clear expression of wishes included and the attorney believes it to be in the donor’s best interests.
Clearly, it’s far better to consider gifting earlier rather than leaving it to chance. And by doing so, the donor can take pleasure in the benefit their generosity has on their loved ones.
As ever, it’s critical to take professional advice before embarking on a big IHT give away. So for advice on IHT planning and/or putting a Lasting Power of Attorney document in place, please speak to your contact partner or to Andrew Tricker email@example.com.
Source: The Standard Life