The MacDougall case is a dispute  currently before the High Court and serves as a powerful reminder of the risks that can arise where Wills, lifetime gifting and Lasting Powers of Attorney (LPAs) intersect.

In the case brought by Gary MacDougall, the court is being asked to consider both the validity of his late mother’s will and the scope of the powers exercised by her attorneys under an LPA. For estate planners, financial advisers and mortgage advisers, the issues raised go to the heart of best practice when guiding clients through inheritance planning. It also highlights the importance of having the correct documentation in place, even if only to serve (as in this instance) as a means to hold individuals to account for their actions.

The Background

Gary MacDougall is challenging the 2011 will of his mother, Jeanne MacDougall, who died in 2020 with an estate reportedly worth £2.5 million. Under a previous will, Mr MacDougall and his family were due to inherit two properties valued at approximately £2.6 million. Under the 2011 will, most of the estate passed to his sister and brother-in-law, Sandra and Lloyd Thomas, leaving Mr MacDougall only a share of residue — which he claims may amount to nothing once administration expenses are deducted.

Mr MacDougall alleges that his mother lacked testamentary capacity due to Alzheimer’s disease and that she was unduly influenced. It is also alleged that significant lifetime gifts and property sales were made at an undervalue while she lacked capacity and that the attorneys (his sister and brother-in-law) exceeded their authority under a Lasting Power of Attorney.

Over an eight-year period, more than £2 million was spent from Mrs MacDougall’s accounts while the Thomases were acting as attorneys. Allegations include spending on luxury travel, shopping, a wedding at the Savoy, a new Jaguar, and dining at The Ivy. The attorneys maintain they acted in good faith and in accordance with Mrs MacDougall’s wishes.

The court will ultimately determine the facts. However, the case provides an important framework for advisers.

Understanding the Role of an Attorney

Under the Mental Capacity Act 2005, an attorney appointed under a Lasting Power of Attorney must always act in the donor’s best interests and consider the donor’s past and present wishes, beliefs and values. It’s important that best efforts are made to avoid conflicts of interest. Attorneys should always keep the donor’s funds entirely separate from their own and should not benefit themselves unless properly authorised.

The test of “best interests” is not a subjective one. It requires structured consideration of statutory factors and, crucially, evidence. Advisers should ensure clients and attorneys understand that an LPA is not a licence to manage assets as if they were already inherited. Attorneys are fiduciaries — not beneficiaries in waiting.

The Rules on Gifting: A Frequent Risk Area

One of the most common areas of confusion is gifting. Under an LPA, attorneys may only make gifts on customary occasions (e.g. birthdays, weddings, religious holidays) and to persons connected with the donor to a reasonable value in light of the donor’s financial circumstances.

The Office of the Public Guardian (OPG) guidance makes clear that:

• Selling property at an undervalue can amount to a gift.
• Gifts must be affordable.
• Attorneys may be ordered to repay funds if they misuse their authority.

If a proposed gift falls outside these limited circumstances, approval from the Court of Protection is required. For financial advisers, this creates practical advisory considerations to make attorneys aware of such as:

• Has the donor historically made similar gifts?
• Is there evidence supporting the donor’s likely wishes?
• Are all family members being treated consistently?
• Would the gift compromise current or future care needs?

Even where attorneys believe they are acting “in good faith”, that belief will not override statutory limits

Good Faith: Not a Safe Harbour

In this particular case, the Thomases argue they acted in good faith. However, good faith is fact-specific and loosely defined. At its core, it hinges on honesty — but honesty alone does not cure a breach of fiduciary duty. Where personal interests and fiduciary duties overlap — particularly where attorneys are also major beneficiaries — scrutiny will be intense and as advisers we should always encourage transparent record-keeping, contemporaneous documentation of decision-making (good record keeping), encourage independent financial advice for attorneys where conflicts may arise. And if there’s uncertainty? Early recourse to the Court of Protection.

Testamentary Capacity: Dementia Is Not Determinative

The case also revisits the longstanding test for testamentary capacity (unchanged since 1870). A testator must:

• Understand they are making a will.
• Understand the nature and extent of their assets.
• Understand the claims of potential beneficiaries.
• Not be suffering from a disorder of the mind affecting decision-making.

Importantly, a diagnosis of dementia does not automatically invalidate a will. Capacity is decision-specific and time-specific. Courts may uphold a will if they deem that it appears rational, there are no suspicious circumstances and a professional has taken clear instructions and assessed capacity properly.

For estate planners, robust capacity assessments and detailed attendance notes remain essential — particularly where there are complicated family dynamics or where significant changes are being made to previous wills. Do remember that we can always support you to facilitate an independent capacity assessment from a a qualified medical professional where there may be concerns.

Practical Guidance for Advisers

The MacDougall case underlines several best practice steps when advising clients:

1. Align Wills and LPAs Strategically

Clients often treat wills and LPAs as separate exercises. They are not. Attorneys may manage substantial wealth for years before death. If the attorney is also a primary beneficiary, conflicts must be anticipated and mitigated.

2. Discuss Safeguards

Consider appointing several attorneys and ask the client to provide instructions as to how decisions should be made for aspects such as handling large transactions. It may be that attorneys are mandated to seek assistance from a qualified professional (such as a financial adviser or tax adviser) for big ticket items.

3. Evidence the Client’s Intentions

Where clients wish attorneys to continue a pattern of gifting, this should be documented clearly — ideally both in the LPA and in supporting letters of wishes.

4. Advise Attorneys Proactively

Advisers are frequently asked whether a proposed transaction is permissible. Where there is doubt, advisers should reference the Mental Capacity Act 2005 and OPG guidance and recommend Court of Protection approval where appropriate. We can also support you on this with advice from our Court of Protection specialists.

5. Review Regularly

Family dynamics and capacity issues evolve. Periodic reviews of estate planning arrangements can prevent costly litigation later.

Why This Matters for Advisers

Disputes of this nature can as outlined in the MacDougall estate can fundamentally erode the overall estate value due to the cost of the litigation process alone. Of course, family breakdowns then become inevitable which is the outcome we are fundamentally trying to avoid by putting the correct planning in place combined with ongoing support and advice, not only to clients but also to their chosen executors and/or attorneys.

The key takeaway is this: an LPA is a powerful instrument, and the role of an attorney is one that is defined by law. When wills, gifting and attorney powers are not aligned or carefully documented, the risk of individuals underestimating or over utilising their powers can be great.

At BTWC, we work closely with professional advisers to ensure clients’ wills and LPAs are structured coherently, risks are identified early, and intentions are properly evidenced — reducing the likelihood that families find themselves in court years later.

If you would like to discuss how this case may affect your clients’ planning strategies, please get in touch with our team at www.btwc.co.uk.