Both Lasting Powers of Attorney (LPAs) and Deputy Orders are legal instruments appointing persons to make decisions on behalf of someone who has become incapable of making or communicating that decision personally. They can be used to cover decisions relating to Property & Finance and Health & Welfare; however, Deputy Orders are rarely granted in relation to the latter.
LPAs and Deputy Orders have similar functions but also some key differences. The main difference between the two is procedural. The most notable benefit of an LPA is that it gives you, as Donor, the choice of whom to appoint as your Attorneys whilst you still have the mental capacity to do so. You can control the powers you wish to grant your Attorneys. The LPA may be used if you lose capacity or when you ask an Attorney to act on your behalf. The process for assessing capacity is detailed within the Mental Capacity Act 2005 and its Code of Practice. Broadly, you need to be able to understand relevant information, retain that information and weigh it up and communicate your decision e.g. to appoint an Attorney. Property & Finance LPAs have the advantage that they may be used whilst you retain capacity to consent to your Attorneys acting for you, if the appropriate permission is granted.
A person may only create LPAs if they have the capacity to do so. If they lack that capacity, an application will instead need to be made to the Court of Protection for the appointment of a Deputy. Anyone over the age of 18 can be appointed Deputy if the Court approves them. LPAs will reflect someone’s wishes accurately and often more so than a Deputy Order, which risks having the Court appoint someone as Deputy that you would not necessarily have chosen personally. Close family members need to be notified of the Court application and are given the opportunity to object to a person’s appointment. This can result in the application process taking significantly longer – up to 6 months – and is much more expensive than the £82 registration fee for LPAs.
Supervision of the use of the two instruments is significantly different. Deputyships have more safeguards to help protect you from any financial abuse. These include the following obligations:
- A Deputy must report to the Office of the Public Guardian (OPG) annually and account for their expenditure during the year
- A Deputy must take out a security bond for each year of their appointment. This is an insurance policy in case of the Deputy mismanaging your funds
The additional obligations on Deputies and restrictions in relation to the availability and process of setting up a Deputy Order can be seen as a way to counter your lack of control over the appointment of a Deputy. If you would like further information in relation to setting up LPAs or applying for a Deputy Order, please contact a member of our Private Client team who will be happy to assist. Our solicitors are also experienced in acting as Attorneys for our clients and would be happy to discuss this possibility with you.
7th January 2019