Lasting Powers of Attorney – The importance of making the right choice

Scarlett Richardson, a solicitor from Harrison Drury’s private client team, explains the role of Lasting Powers of Attorney, and how it compares to a Court of Protection Deputyship application.

According to a recent survey from the Office of the Public Guardian, 45 per cent of people aged 45 and over know nothing about Lasting Powers of Attorney. In addition, the Office of the Public Guardian (OPG) has found that less than one per cent of the UK adult population has a Lasting Power of Attorney in place.

A Lasting Power of Attorney (LPA) enables people to choose someone they trust to make decisions on their behalf if they are no longer able to make decisions for themselves. It is a formal document whereby the ‘donor’ appoints one or more person (the ‘attorneys’) to manage their property and finances and/or health and welfare.

However, an LPA cannot be prepared by you once you lose your mental capacity. This is important to note, as a study by Alzheimer’s Society sadly reports, that one in three people aged over 65 will develop dementia.

An issue our private client team at Harrison Drury often encounters, is that relatives who wish to help manage the finances and welfare of their loved ones, reach out to us too late and only after the family member no longer has the mental capacity to prepare an LPA.

It is an unfortunate misconception that family members can apply for a Lasting Power of Attorney on behalf of a loved one. This is not the case. Only the ‘donor’ can make a Lasting Power of Attorney for their own benefit.

In the case where mental capacity is lost and a person is unable to prepare an LPA, a Court of Protection Deputyship order is required to legally manage the person in question’s affairs.

While both documents (LPA and deputyship order) provide the same outcome, where ‘person A’ is legally appointed to manage the financial affairs of ‘person B’, they have key differences which I have covered below.

The differences between a Lasting Power of Attorney and a deputyship order

Varying time scales

On average it takes approximately three to four months from instruction to completion to prepare and register an LPA. In contrast, a deputyship application (to obtain a deputyship order) can take anywhere between 4-12 months.

The comparison of fees

Application fees: A straightforward financial LPA will typically cost in the region of £400 plus VAT per person. This is considerably cheaper than a deputyship application which is fixed at £950 plus VAT.

Court fees: The Office of the Public Guardian charge a fee of £82 to register an LPA. The current deputyship application fee is £365. In addition, after a deputyship order has been made, an annual supervision fee will also be payable to the Office of the Public Guardian.

The decision-maker

With an LPA, the ‘donor’ decides who they wish to appoint to manage their affairs. With a deputyship order, it is a court judge that will make the decision after reviewing the application.

Managing paperwork

There is only one form to complete and submit with an LPA. In comparison, there are four lengthy forms that must be submitted when applying for a deputyship order with additional forms to be completed and served after the application is issued.

On-going procedures

Once an LPA has been registered there is little involvement with the OPG unless concerns are raised that the appointed attorney is abusing or neglecting their position. When a deputyship order has been made, annual accounts must be submitted to the OPG for them to review.

It is common to receive contact from a Court of Protection visitor, whose role it is to investigate the handling of deputyship matters, meeting with both the appointed deputy and the person for whom they are appointed to manage their affairs.

In summary it is far more time and cost efficient to put in place a Lasting Power of Attorney. It will also enable your loved ones to be prepared to deal with your finances and/or welfare should you at any point become unwell or unable to do so yourself.

If you would like further information regarding LPAs or Deputyship applications, please contact Harrison Drury’s private client team on 01772 258321.