Can an Attorney Make Gifts? The Rules, Limits and Court Approval

By Matt Cresswell, Founder of Power of Attorney Online and author of
Everything you ever wanted to know about LPAs (but were afraid to ask)

19th August 2026

When someone makes a Property and Financial Affairs Lasting Power of Attorney, it is natural to assume their attorney can simply carry on managing their money in whatever way seems sensible. But Can an Attorney Make Gifts? is a much more complicated question than it first appears. An attorney can make some gifts on behalf of the person they represent, but the legal authority is deliberately narrow. The Mental Capacity Act 2005 allows certain gifts in specific circumstances, while larger or unusual gifts may require permission from the Court of Protection. The fact that a person used to make generous gifts themselves does not automatically give their attorney permission to continue doing so. An attorney must act in the donor’s best interests, consider their present and future needs, and be able to justify what they have done.

That distinction matters because gifting someone else’s money is one of the areas where an attorney can accidentally move from sensible financial management into an unauthorised transaction.

It is also one of those situations where family assumptions can cause trouble.

A parent may have always given their grandchildren money at Christmas. They may have helped a child with university fees. They may have intended to reduce their estate during their lifetime. But once that parent lacks mental capacity and an attorney is managing their affairs, the attorney does not simply inherit all of those decision-making powers.

The rules change.

The statutory gift rules in plain English

The starting point is section 12 of the Mental Capacity Act 2005.

For a Property and Financial Affairs attorney, the law permits certain gifts without a separate application to the Court of Protection.

The basic exception is relatively narrow. A gift can normally be made where it is given on a customary occasion, to someone who is related or connected to the donor, or to a charity the donor supported or might have supported, and where the value is reasonable having regard to all the circumstances, particularly the size of the donor’s estate.

Think birthdays, weddings, anniversaries, Christmas or other cultural or religious occasions.

That doesn’t mean an attorney can simply decide that a £5,000 birthday present is acceptable because the donor was generous when they had capacity. “Reasonable” is not a fixed figure.

The Office of the Public Guardian doesn’t publish a universal maximum amount that an attorney can give. Instead, the attorney has to consider the donor’s financial circumstances, their current and future needs, their likely care costs and whether the gift is genuinely consistent with their best interests.

That is an important point for attorneys to understand. There is no magic number.

A gift of £500 might be perfectly affordable for one person and completely inappropriate for another.

If someone has £2 million in assets and no foreseeable financial pressures, the context is very different from someone with £40,000 in savings who is already paying substantial care fees.

The attorney has to look at the whole picture.

What counts as a gift?

A gift is not limited to putting cash into someone’s hand.

The OPG describes a gift as transferring ownership of money, property or possessions from the person whose affairs you manage to someone else without receiving full payment in return.

That can cover arrangements families sometimes do not think of as gifting. For example, allowing someone to live in the donor’s property without paying the appropriate rent can amount to a gift. So can an interest-free loan.

Paying another person’s expenses may also amount to a gift or another type of transaction that requires authority.

The government specifically says that attorneys need Court of Protection approval for things such as paying someone else’s school or university fees, allowing someone to live in the donor’s property without paying market rent, and interest-free loans.

This is why the question should not simply be, “Can I give my daughter £10,000?”

It should be, “Am I transferring something of value from the donor to somebody else, and do I have legal authority to do that?”

A gift must be reasonable and affordable

The word “reasonable” does a lot of work in the rules.

The OPG says an attorney should consider the donor’s financial position, including their income, assets, capital and savings, as well as their present and future needs. Those needs can include the cost of care.

That means an attorney can’t look only at today’s bank balance. Imagine that a donor has £150,000 in savings. They have just moved into a care home and their fees are £6,000 a month.

Their attorney might be asked by other family members to continue making the generous gifts the donor used to make.

The fact that the donor made those gifts regularly in the past is relevant. But it is not decisive.

Their financial circumstances have changed. The attorney has to consider whether making the gift could affect the donor’s ability to pay for their care and meet their own needs for the rest of their life.

The OPG’s current guidance specifically says that gifts should not affect a person’s ability to pay for their care for the rest of their life.

That is why “Mum would have wanted it” is not, by itself, enough.

The donor’s wishes still matter

This can feel slightly uncomfortable for families. If someone has lost capacity, surely their attorney should try to do what they would have wanted?

Yes, their past and present wishes are important. But an attorney’s job is not simply to recreate every decision the donor might once have made.

The Mental Capacity Act requires the attorney to act in the donor’s best interests. That involves looking at the person’s wishes, feelings, beliefs and values alongside their current circumstances and future needs.

The donor’s will can also be relevant evidence of their wishes, but the OPG makes an important distinction: an attorney cannot simply give away assets during the donor’s lifetime because the will says those assets should eventually go to particular beneficiaries.

A will is not a lifetime gifting instruction. That distinction becomes particularly important when an attorney is also one of the beneficiaries of the donor’s estate.

The gifts an attorney can’t simply make

This is where the limits become much clearer.

An attorney generally can’t use the donor’s money to make substantial gifts simply because they believe it is good estate planning.

They can’t decide to give away a house to the donor’s children. They can’t simply transfer £100,000 to a family member because the donor had previously said that was what they wanted. They can’t make an interest-free loan to themselves.

They can’t sell the donor’s property to a family member for £200,000 when it is worth £300,000 simply because the family considers the £200,000 “fair”.

These are the kinds of transactions where Court of Protection authority may be required.

The OPG’s guidance specifically identifies creating a trust of the donor’s property, buying or selling property below market value, investments in the donor’s own business, certain variations to a will and transactions involving a conflict between the attorney’s interests and the donor’s interests as matters requiring an application to the Court of Protection.

There is a useful rule of thumb here.

The more substantial, unusual or self-interested the transaction, the less safe it is to assume that the attorney can simply do it.

What about inheritance tax planning?

This is one of the biggest areas of confusion. Someone may have made an LPA specifically because they want their children to be able to manage their estate if they become unable to do so.

They may even have discussed inheritance tax planning with their family. That doesn’t automatically authorise the attorney to start giving away large amounts of money.

The OPG’s guidance says that larger gifts, including gifts made as part of inheritance tax planning, require an application to the Court of Protection.

This is a crucial distinction between having an intention and having legal authority.

Your parent can tell you, while they have capacity, “If I ever lose capacity, I want you to give £50,000 to each of my children.”

That may be evidence of their wishes. But it does not mean that the attorney can necessarily carry out the instruction without court approval.

In fact, the government’s current LPA guidance says that an instruction requiring attorneys to use the donor’s money to benefit or maintain third parties can be invalid because it could prevent the attorneys from acting in the donor’s best interests. A preference expressing what the donor would like can be valid, but the attorney still has to consider whether the proposed gift is reasonable.

That distinction between an instruction and a preference is particularly important when an LPA is being prepared.

Why taking money as a loan is especially risky

One of the easiest mistakes for an attorney to make is thinking, “I’m only borrowing it.”

The OPG’s current guidance is clear: an attorney acting under an LPA doesn’t have authority to take a loan from the donor’s funds for themselves or anyone else. If an attorney wants to make a loan, they need to apply to the Court of Protection. That includes an interest-free loan.

It also creates an obvious conflict of interest. The attorney is effectively deciding whether to give money to themselves.

That is precisely the sort of situation where an attorney should stop and obtain proper advice rather than relying on family consensus. The consequences of getting this wrong can be serious.

The OPG says an unauthorised loan can be treated as an unauthorised gift. It may ask for the money to be repaid and can refer the matter to the Court of Protection, including in circumstances where an attorney may ultimately be removed.

What happens if an attorney gives too much?

The Office of the Public Guardian can investigate concerns about how an attorney is managing someone’s affairs.

That does not mean every £50 birthday present will result in an investigation. But substantial, unusual or apparently self-interested transactions can raise questions.

The OPG can require an attorney to provide information and documents about how the donor’s money has been used. It can also investigate complaints and concerns about an attorney’s conduct.

If an attorney has made gifts outside their authority, possible consequences include being asked to seek repayment, being required to obtain retrospective Court of Protection approval, providing further information about gifts or being removed as attorney.

In more serious cases, the OPG can apply to the court to suspend or remove an attorney and may seek protective measures over the donor’s finances. This is why record keeping matters so much.

An attorney should be able to explain what they did, why they did it and how they concluded that it was appropriate.

The paperwork that protects an attorney

Good record keeping is not about assuming that someone is going to accuse you of wrongdoing.

It is about making your decisions explainable.

The government tells attorneys to keep records of important decisions and, for a Property and Financial Affairs LPA, records of the donor’s assets, income and spending. The OPG and Court of Protection can ask to see these records.

For gifts, a sensible record might include:

What was given.

Who received it.

Why it was given.

What the occasion was.

How much it was worth.

What the donor’s financial position was at the time.

Why the gift was considered reasonable.

Whether the donor had made similar gifts before losing capacity.

That last point can be particularly useful.

If your mum gave each grandchild £50 every Christmas for 15 years and you continue that tradition after she loses capacity, there is a clear history behind the decision. If she suddenly has £10,000 transferred to a grandchild’s account, there is a much bigger question to answer.

The amounts are not the only issue. The context matters.

Property gifts are a different level of risk

If you are an attorney and someone asks, “Can we just transfer Mum’s house to the children now?”, stop.

The answer is not simply contained in the LPA. The OPG says that gifting real property, including a whole property or part of one, is almost certainly outside an attorney’s powers without Court of Protection permission. This includes gifting the proceeds from a property sale.

The same caution applies where an attorney or their family wants to buy the donor’s property. If a property is sold below market value, the transaction can involve a gift element.

The government specifically advises seeking legal advice where an attorney wants to sell below market value, buy the property themselves or give it to someone else. This is an area where trying to save money by treating a complicated transaction as an informal family arrangement can prove very expensive.

How Court of Protection approval works

If a proposed gift falls outside the attorney’s legal authority, the answer is not to make the gift first and ask questions afterwards.

The OPG says the attorney should apply to the Court of Protection and wait for the court’s decision before making the gift. The OPG itself cannot approve the gift. The application is considered as a decision about the donor’s interests.

In many gift applications, the donor is formally included in the case and the Official Solicitor may be appointed to represent their interests. The court can consider evidence about the proposed gift and whether it is in the donor’s best interests.

This is one reason substantial gifting should not be treated as a routine part of being an attorney. Court approval exists precisely because there is a point at which the attorney’s authority runs out.

Can you write gift powers into a new LPA?

This is where careful drafting matters.

A donor can put preferences and instructions into their LPA. But they can’t simply use the instructions section to give the attorney powers that the law does not otherwise provide.

The current government guidance is explicit that a donor can restrict the powers given to attorneys but cannot expand those powers beyond what the law permits.

For example, wording that says an attorney must use the donor’s money to maintain another person can create a problem because it could require the attorney to act against the donor’s best interests. By contrast, a preference saying that the donor would like their attorneys to consider making gifts to particular people may be valid.

The difference is subtle but important. This is one reason we would caution against copying complex gift wording from an online template without understanding exactly what it does.

An apparently helpful instruction can create uncertainty or become ineffective.

Why leaving the gift question alone can sometimes be better

There is a tendency to think that a more detailed LPA must automatically be a better LPA.

Not necessarily. If you do not have a particular, well-considered reason to include a preference or instruction about gifts, leaving the section uncomplicated may be the safer approach.

The attorney will still have the statutory authority to make appropriate customary gifts within the legal limits. Adding elaborate wording about inheritance, grandchildren, property or family maintenance can introduce additional complexity.

The government’s LPA guidance specifically warns that wording concerning gifts and the use of funds for others needs careful consideration. This is an area where simplicity can be a strength. The purpose of an LPA is not to write a complete estate plan into one form.

It is to give someone appropriate authority to make decisions on your behalf while remaining within the law.

What we see when reviewing LPA applications

At Power of Attorney Online, one of the reasons we built expert checks into our service is that small wording or completion mistakes can have consequences later.

Our published guidance uses the figure that 85% of LPA applications contain mistakes. That is a broader application-quality figure rather than a claim that 85% of applications contain gifting problems, but it illustrates why we believe checking the form before registration matters.

Gift wording is particularly worth treating carefully. A sentence that sounds perfectly sensible in ordinary English can have a very different effect when placed into the instructions section of an LPA.

The key question is not, “Does this sentence say what I want?” It is, “Does this wording give my attorney a lawful power, or am I trying to instruct them to do something that the law does not allow them to do?”

If the latter, adding more words does not solve the problem.

Gifting and wider estate planning are not the same thing

This is probably the most important distinction to take away.

An LPA is an incapacity-planning document. A will is an estate-planning document.

Inheritance tax planning is another area again. They overlap because they all concern money, family and future decisions.

But they do not give the same legal powers.

If you are thinking about reducing your estate, creating trusts, making substantial lifetime gifts or changing the eventual distribution of your assets, that is usually something to discuss with an appropriately qualified professional rather than assuming your attorney can implement the plan if you lose capacity.

The attorney’s job is to manage the donor’s affairs.

It is not to reorganise the donor’s estate simply because they think it would be tax-efficient or because family members would benefit.

A practical decision framework

The easiest way to approach a proposed gift is to work through the circumstances before touching the money.

Situation	Can an attorney usually do it without Court approval?	Sensible next step
£50 birthday gift to a grandchild, consistent with past gifts	Potentially yes	Check affordability and record the decision
Normal Christmas gifts to close family	Potentially yes	Consider the donor’s circumstances and usual pattern
Regular charity donation the donor historically made	Potentially yes	Check affordability and previous giving
£5,000 gift to a child	Not automatically	Consider whether Court approval is required
Paying a grandchild’s university fees	Generally no	Apply to the Court of Protection
Interest-free loan to a family member	No	Court approval required
Transferring the donor’s house to children	No	Court of Protection application and professional advice
Selling the donor’s property below market value	Not automatically	Obtain advice and consider Court approval
Large inheritance tax planning gift	No	Court of Protection approval required

The table is deliberately cautious. There is no universal gift amount that makes something lawful.

The OPG says it can’t provide a precise monetary threshold for what constitutes a reasonable gift. Each decision has to be considered in context.

The biggest mistake is thinking “I know what they wanted”

An attorney may know the donor better than anyone else.

That doesn’t mean they can simply do whatever they believe the donor would have done. The attorney has a legal role. That role comes with authority, responsibilities and limits.

If the donor used to give every grandchild £100 at Christmas, continuing that tradition may be straightforward if it remains affordable and appropriate.

If the donor once said, “When I’m old, give the house to the children,” that is very different.

The first is potentially an ordinary customary gift. The second could involve transferring a major asset and would almost certainly require Court of Protection involvement.

The attorney has to resist the temptation to turn a general understanding of the donor’s wishes into an instruction to redistribute their wealth.

FAQs

Can an attorney give money to family members?

Yes, in certain circumstances. An attorney can normally make reasonable gifts on customary occasions to people who are related or connected to the donor, or to charities the donor supported or might have supported. The gift must be reasonable in the circumstances and the donor must be able to afford it.

Can an attorney give themselves money?

An attorney cannot simply take money from the donor as a gift. They must not use their position to benefit themselves, and transactions involving a conflict of interest can require Court of Protection approval.

Can an attorney lend money to a family member?

Not without authority from the Court of Protection. The OPG says attorneys do not have authority to take loans from the donor’s funds, including interest-free loans, and an unauthorised loan can be treated as an unauthorised gift.

Can an attorney give away the donor’s house?

Generally, no. The OPG says gifting real property is almost certainly outside an attorney’s powers and is likely to require an application to the Court of Protection.

Can an attorney make gifts to reduce inheritance tax?

Not simply because they believe the donor would have wanted to reduce their inheritance tax liability. Larger gifts made as part of inheritance tax planning require Court of Protection approval.

Can an LPA include instructions about gifts?

An LPA can contain preferences and instructions, but the donor cannot use instructions to give an attorney powers that the law does not provide. Current government guidance says a preference expressing that the donor would like a gift to be considered can be valid, whereas a compulsory instruction to use the donor’s money to benefit others can be invalid.

Can an attorney change the donor’s will?

No. An attorney cannot simply make or change a will on behalf of the donor. Where a person lacks capacity and needs a new will, an application for a statutory will can be made to the Court of Protection.

What happens if an attorney makes an unauthorised gift?

The OPG may investigate. The attorney could be asked to provide information, seek repayment from the recipient, obtain retrospective court approval or, in serious cases, face removal as attorney.

Does the donor have to include gift instructions in their LPA?

No. There is no requirement to include special gift instructions. The statutory rules already provide limited authority for certain gifts. If someone has a particular gifting intention, it is worth considering the wording carefully rather than assuming that adding an instruction will automatically give the attorney broader powers.

The safest approach is usually the simplest one

Being an attorney does not mean becoming the owner of someone else’s money. It means taking responsibility for managing their affairs within the authority they have given you and the law that governs your role.

That is particularly important when gifts are involved. If the donor has always given modest birthday and Christmas presents, continuing those traditions may be entirely appropriate. If the proposed transaction involves a large sum, property, a family member, a loan, inheritance tax planning or a transaction that benefits the attorney personally, it is time to stop and check the position before proceeding. The Court of Protection is there for precisely those situations where the proposed transaction falls outside the attorney’s ordinary authority.

And if you are making a new LPA, do not assume that adding detailed gifting instructions is automatically helpful. Sometimes the best LPA is the one that gives your attorneys clear authority without trying to turn the document into a substitute for a will or estate-planning strategy.

An LPA gives someone the authority to help when you cannot make decisions for yourself. It doesn’t give them permission to give your money away as they please.

That boundary is there to protect you, your family and, ultimately, the attorney themselves.