Question “I have taken over the management of my mother’s finances under a power of attorney which she granted. My mother has always paid our children’s school fees. Can I continue to make these payments?”
Answer The first question to ask is whether your mother has lost mental capacity? An individual’s capacity can fluctuate and is decision-specific, which means it can be present for some decisions but absent for others. If you have any doubts, then you should discuss her capacity with a medical professional. Sometimes a formal capacity assessment is required.
If your mother does have capacity then she can instruct you to continue paying your children’s school fees on her behalf. Make sure, however, you keep a good record of any gifts that you make as attorney.
If your mother has lost capacity, then the payment of your children’s school fees would be subject to the strict limits on gift-making imposed on attorneys. In the case of a Lasting Power of Attorney, the rule is that the gift should be: 1. Given on a customary occasion, such as a birthday or wedding; 2. Given to someone related or connected to the person; and 3. Be of reasonable value, taking into account the person’s estate.
It is unlikely the payment of school fees will meet all three criteria, and you will be unable to continue the payment without approval from the Court of Protection. If you make an application for approval, the Court will consider whether or not your mother has sufficient funds to make the gift and whether the gift would be in her best interests, taking into account her assets, income, current and future needs, past and present wishes, and any other factors. The Court of Protection can take up to three months to reach a decision, which may not sit comfortably with school term times.
The LPA document itself can contain guidance in the form of preferences or instructions from your mother. There is also some useful information published by the Office of the Public Guardian, which can be found here.
Sarah Mannoch is a Private Client Solicitor at the accountants and financial advisers Kreston Reeves. Please contact Sarah here.