Lasting Power of Attorney .V. Deputyship
As a firm we have seen an increase in deputyship applications to the Court of Protection. This occurs when a person has not made a Lasting Power of Attorney (“LPA”) and an inability to cope has become an unexpected issue. We would all like to think that our health, mental or physical, will not fail us but in reality you cannot know what life has in store for you. Putting in place a power of attorney can give you peace of mind knowing that if you do need assistance in the future at least you have decided who is to give that help.
If no attorneys have been appointed and your mental health deteriorates to a point where you can no longer copy alone, the Court of Protection will appoint a deputy to look after your affairs and this will not necessarily be someone you would have chosen yourself.
There does seem to be a certain amount of apprehension when it comes to appointing attorneys, thinking that once it is signed that’s it, your attorneys are in charge. In reality an LPA can allow your attorneys to do as little or as much as you need, depending on how your health progresses. It could be that during your lifetime you have no mental health problems but your physical health may suffer – even if just frailty with old age. An example might be that you are still happy to do the weekly shopping but don’t feel up to deciding on the best house insurance.
Having an LPA for property and financial affairs means that you could ask your attorneys for help when you have no mental health issues but are just finding it difficult to cope. It does not mean that you no longer have a say in your affairs. This would only happen if your mental health failed to a point where you could no longer make decisions for yourself.
There is also an LPA for personal health and welfare and attorneys appointed in this document can only use it if you no longer have mental capacity. It could be considered as a way of planning for your personal care in case you can’t make decisions for yourself in the future.
If no LPA is in place and an application to the Court of Protection has to be made, the process takes a lot longer and costs considerably more. Completing and registering an LPA takes about 3 months and there is a registration fee of £110 payable to the OPG. If you use a solicitor the legal costs will be around £450 + VAT. Completing an application to the Court of Protection and receiving a Court Order appointing a deputy takes around 6 months and there is a court fee of £400. If you use a solicitor the current set fee for the application is £850 +VAT. In addition, a security bond must be taken out to cover the assets the deputy will be looking after. This depends on the value of the assets but is an annual premium of around £150-200. A deputy is supervised by the OPG who charge a one off assessment fee of £100 and an annual supervision fee of around £300. A deputy has to complete annual accounts for submission to the OPG. The comparison is easier to see on the table below:
|Lasting Power of Attorney||Deputyship|
|Timescale||3 months||6 months|
|Solicitor’s fees (if used)||£450 + VAT||£850 + VAT|
|Security Bond||–||£150-£200 annually|
|Deputy Assessment fee||–||£100|
|OPG supervision fee||–||£300 annually|
There is as you can see a substantial difference in the timescale and on the overall costs – £650 for an LPA versus £2,000 for a Court Order. Once an LPA is registered there are no further costs whereas a Court appointed deputy will have to pay the security bond premium and OPG supervision fees on an annual basis and all from your funds.
It also important to note that if you own a property jointly with someone else, your Court appointed deputy does not have the right to sell your share on your behalf. It would involve a separate application to the Court asking them to appoint someone as your trustee to sell on your behalf. This would mean a further court fee of £400 and further legal costs. An attorney using an LPA for property and financial affairs would not have these problems.
You can make an LPA at any time provided you are over 18 and have the mental capacity to understand the concept of appointing an attorney and what powers you are giving them. Mental capacity is the ability to make a specific decision at the time that it needs to be made. An LPA has to be registered with the Office of the Public Guardian (“OPG”) before it can be used. Once registered it is available for use just as soon as you need it to be.
An application to the Court of Protection is only made when it is apparent that you need help and have no attorney in place. This means a delay of 6 months or more before the Court Order is issued and the deputy can assist.
It might be that you never actually need assistance and your LPA just gathers dust but it could be seen as money well spent to have that safety net in place.
If you do not have an LPA and are unsure how to proceed or would like some more information, please contact our Private Client department on 01473 230033.