Most people will have heard of a Lasting Power of Attorney – the document that allows you to nominate someone you trust to make decisions for you, in the event that you lose mental capacity. Lasting Powers of Attorney replaced Enduring Powers of Attorney and can be made in respect of two types of decisions: those concerning your finances and property, and those concerning your health and care.
If you lose mental capacity and you have not made a Lasting Power of Attorney (LPA), someone will have to apply to the Court of Protection for a Deputyship Order in order to make decisions on your behalf. Just like LPAs, there are two types of Deputyship Order: one concerning finances and the other concerning health and care decisions. Someone who is appointed to make either type of decisions for you by the Court of Protection is called a Deputy.
So is it better to make a Lasting Power of Attorney now; or leave those close to you to apply for a Deputyship Order in the future, should one be needed?
Nominate someone you trust
If you make a Lasting Power of Attorney, you can decide who should be in charge of your affairs in the event that you lose mental capacity. This allows you to choose someone you trust as your ‘Attorney’ rather than leaving things to chance.
Your attorney needs to be 18 or over and must have the mental capacity to make their own decisions. They could be:
- a relative.
- a friend.
- a professional, for example a solicitor.
- your husband, wife or partner.
If you don’t make a Lasting Power of Attorney, anyone can apply to the Court for a Deputyship Order – and although typically this will be a close friend or relative, it may not have been the person you would have chosen.
Consider, for example, those within your family or friendship circle that are not particularly good with money: would you want them to act? If you lose mental capacity and there is no LPA in place, there is nothing to stop them from applying to be your sole Deputy for property and finance, giving them the power to make financial decisions and investments for you.
You can appoint more than one attorney
With a Lasting Power of Attorney, you can nominate either one or a number of people that you trust to be your attorneys. You can also specify replacement attorneys, if your original choices are unable to act.
With a Deputyship Order, it may be that only one person applies to the Court for the right to make decisions for you. This would allow them to exercise all of the powers awarded by the Court, without consulting anyone else. However, Deputies do have to keep records and report to the Court of Protection each year.
You decide on the limit of powers
With a Property and Finance Deputyship Order, the Court decides what powers your Deputy should have. For example, they might grant your Deputy the power to make investments on your behalf or to sell your home.
With a Lasting Power of Attorney, you are free to limit your Attorney’s power as you choose. Provided that you include the limitations within the ‘Instructions’ box of the LPA form, the limitations will be binding on your Attorneys.
|Lasting Powers of Attorney||Deputyship Order|
|Attorneys must follow any instructions/limitations that you have included in the Lasting Power of Attorney. You can for example specify that they may not sell your home or make gifts on your behalf.||Deputies must act within the powers afforded to them by the Court. For a Finance Deputyship Order, typically these will include the power to manage your money, pay bills, make reasonable gifts (that you would have made), and make investments. They may also ask the Court to grant them the power in the Order to sell your home.|
You decide how your attorneys can make decisions
With a Lasting Power of Attorney, you can decide whether your attorneys must make decisions jointly, or whether they can make them ‘jointly and severally’ which would allow them to act both together and alone.
With Deputyship, the person applying to be Deputy will ask the Court to make the order either for:
- Sole deputyship
- Joint deputyship
- Jointly and severally
If the Court appoints a sole deputy, they will be able to act without consulting anyone else. If the Court appoints more than one Deputy, it may allow them to make decisions ‘jointly and severally’ which means they can exercise their powers (such as making investments) without consulting each other.
Cost: Lasting Powers of Attorney v Deputyship
Perhaps one of the most compelling reasons to make a Lasting Power of Attorney now is relatively cheap cost involved, compared to the costs of applying for a Deputyship Order.
|Cost to make both types of Lasting Power of Attorney (finance+ Health)||Cost to apply for both types of Deputyship Order|
|Court fees : £164 (£82 per LPA)||Court fees : £800 (£400 per order)|
|Legal fees : £480 + VAT (£240 per LPA)||Legal fees : £900 + VAT|
|Cost for Doctor to complete form COP3 (evidencing loss of mental capacity) : £50 – £300|
|Hearing fee (if necessary) : £500|
|New Deputy Fee : £100 per Deputy|
|Security bond : depends on size of estate|
|Supervision fee: £325 per year in most cases|
Clearly it is far cheaper to make a Lasting Power of Attorney now than for your friends or relatives to apply for a Deputyship Order at a later stage.
Finding the funds
If someone successfully applies for a Finance Deputyship Order to make decisions for you, the fees can be taken from your funds once the order is granted. However, the applicant will need to pay the fees up front, which may be a heavy burden.
If someone applies only for a Health and Care Deputyship Order, they will have to pay the fees up front and cannot recoup them from your funds.
If someone applies for both types of order, they can recoup the fees from your funds once the orders have been granted but again, must find the funds up front.
There is help available with court fees for those on very low incomes: for Finance Deputyship Orders, eligibility is based on your income/savings, while for Health/Care Deputyship Orders, eligibility is based on the applicant’s income/savings. As proof of income/savings is required for help with court fees, often applicants will have to find the funds up front anyway as they will not yet have access to accounts to provide the necessary evidence.
The issue of funding can be problematic if a Deputyship Order is needed with some urgency but nobody can pay the fees. This might happen if, for example, funds are urgently to pay for care, or a disagreement arises with your Consultant, Social Worker or the Local Authority as to where you should live.
Speed to act
Without a Lasting Power of Attorney in place, an application to the Court must be made – and this is not a quick process. As of September 2019 the average time to complete a Deputyship Order was 34 to 47 weeks (finance) and over a year (health). In the meantime, there may be no access to your funds to pay bills or care fees. Urgent applications can be made if there is a genuine need – for example, if you were discharged from hospital and the funds were needed immediately for care – but even urgent applications will take 2 – 3 weeks to deal with.
With an LPA in place, your Attorneys can act for you immediately, provided that the LPA has been registered. There is no delay in accessing much-needed funds in an urgent situation.
If you don’t have a Lasting Power of Attorney in place and a Deputyship Order is needed, will your friends and family agree on who should be Deputy? The person or persons who decide to make the application have a duty to notify all other people involved in your life and at this stage, others may want to be involved with the proceedings. Where there is a dispute, a hearing will typically be necessary, resulting in a hearing fee of £500 (plus any solicitor’s fees if the Court decides you need separate representation). Making an LPA saves stress and arguments down the line.
The requirement to involve you
Whether you make an LPA or someone has to apply for a Deputyship Order to act for you, your Attorney/Deputy has a duty to try and involve you in the decision making process.
|Lasting Power of Attorney||Deputyship Order|
|Your Attorneys must help you to make your own decisions as much as you can||Your Deputies must help you to make your own decisions as much as you can|
|Your Attorneys must make any decisions in your best interests||Your Deputy must make any decisions in your best interests|