Clause 12 - Scope of lasting powers of attorney: gifts
Mental Capacity Bill
3:15 pm
Mr David Lammy (Parliamentary Under-Secretary, Department for Constitutional Affairs; Tottenham, Labour)
Clause 12 allows the donor to authorise his chosen attorney to dispose of his property by making gifts. However, subsection (2) limits that to customary occasions, birthdays, marriages and religious festivals, where presents are traditionally given, or
''to any charity to whom the donor made or might have been expected to make gifts''.
That broadly reflects the restrictions in the Enduring Powers of Attorney Act 1985.
Subsection (2) also provides that when an attorney makes gifts he must have
''regard to all the circumstances and, in particular, the size of the donor's estate.''
Any gift he makes must not be unreasonable in relation to those factors, even though the donor can place any conditions or restrictions on the making of such gifts when he draws up the LPA. Clearly, regardless of the passage of time and changing circumstances, an attorney must have regard to what the donor can reasonably afford.
I suspect that the amendments tabled by the hon. Member for Daventry are intended to ensure that the donor could authorise the making of gifts in such a way that he could make practical arrangements to provide for any dependants or a spouse or an important event years into the future.However, there is a problem with them that makes them undesirable. Amendment No. 27 proposes that the references to gifts in clause 12(1) should include
''the sale of assets at a discount or at less than money's worth.''
Clause 12(1) provides that a property and affairs LPA does not authorise an attorney to make gifts of the donor's property
''except to the extent permitted by subsection (2).''
Amendment No. 27 would lead to the following odd situation under clause 12: attorneys could sell assets at a discount provided that they did so on customary occasions or to a charity. From what the hon. Gentleman said, I am sure that that is not his intention.
As the Bill is drafted, selling assets at a discount could be grounds for the Court of Protection to revoke an LPA under clause 22(3)(b). The court could revoke
an LPA if it was satisfied that the attorney had misbehaved or was behaving in a way that was not ''in P's best interests.'' I say ''could'' with regard to clause 22(3)(b) because, as the hon. Gentleman has mentioned, there may be occasions on which that might in P's best interests—for example, if the person lacking capacity needed his house to be sold and there was a timing issue so that it was thought necessary to sell the property urgently even though it was undervalued.
Many of us in this Committee Room might also decide to accept less money for our property than we could get if we left it on the market a little longer, because we needed the cash. An attorney might need to make such decisions in the person's best interests.