Test cases brought by the Office of the Public Guardian has resulted in a series of clear rules, together with a decision tree, that attorneys can use when deciding whether they can spend the donor's funds for the benefit of other parties, including the attorneys themselves (Re Various Lasting Powers of Attorney, 2019 EWCOP 40).
Hilder HHJ had to examine the wording used by the donors in the LPAs to determine the validity of the relevant clause. She concluded:
- provisions that provide for attorneys to use the donor's funds to benefit persons other than the donor are not invalid as long as they are not linked to a 'customary occasion' as defined by the Act;
- provisions that provide for attorneys to use the donor's funds to benefit persons other than the donor are not valid if and because they relate to provision for a person whom the donor has a legal obligation to maintain;
- provisions that provide for attorneys to use the donor's funds to benefit persons other than the donor may be valid as a written statement of the donor's wishes as long as they are expressed in terms of wishes, but they would be ineffective if they were expressed in mandatory terms;
- provisions that provide for attorneys to use the donor's funds to benefit the attorney themselves are not invalidated by the attorney's fiduciary obligations; and
- provisions that provide for attorneys to use the donor's funds to benefit the attorney themselves are valid because any conflict has been authorised by the donor and the attorney must in any event act in accordance with the donor's best interests.
Link to related article: www.step.org/news/england-and-wales-court-protection-sets-out-rules-valid-gifts-third-parties
