If you lost mental capacity, who would you want to make decisions on your behalf? Planning for the future means considering how your affairs would be managed if you were no longer able to make decisions yourself. Two of the most common legal arrangements designed to provide this protection are a Lasting Power of Attorney (LPA) and an Order from the Court of Protection to appoint a Deputy to look after the affairs of an incapacitated individual. Although both allow another person to manage an individual’s affairs and make decisions in their best interests, they differ significantly in their creation and administration.
An LPA is put in place by an individual while they still have mental capacity, enabling them to appoint trusted people to act on their behalf should they lose capacity in the future. A Deputy, on the other hand, is appointed by the Court of Protection after a person has already lost capacity and is therefore unable to make an LPA due to a lack of capacity. Understanding the distinction between these arrangements is essential, as each carries different implications in terms of cost, timescales, court involvement, and the level of control an individual retains over who will manage their affairs.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney is a legal document that allows a person (known as the donor) to appoint one or more trusted individuals (attorneys) to make decisions on their behalf if they lose mental capacity, or in some cases while they still have capacity. There are two types of LPA:
- Property and Financial Affairs LPA – enables attorneys to manage bank accounts, pay bills, deal with investments, and handle property matters.
- Health and Welfare LPA – allows attorneys to make decisions about medical treatment, care arrangements, and daily welfare if the donor lacks capacity.
When should you make a Lasting Power of Attorney?
The best time to make an LPA is as early as possible while you have mental capacity.
LPAs are often put in place as part of general life planning, particularly when:
- Buying property or managing significant assets.
- Reaching retirement age.
- Receiving a diagnosis that could affect future capacity, such as dementia or Parkinson’s disease.
- Wanting reassurance that trusted family members can assist if needed.
- Preparing your Wills and undertaking Estate Planning.
Creating an LPA in advance is generally quicker, less expensive, and provides greater flexibility than applying to the Court of Protection for the appointment of a deputy once a person has lost mental capacity.
What is a Deputyship Order?
A Deputyship Order may be required where an individual has lost mental capacity and is no longer able to make decisions regarding their property, finances, health, or welfare, but did not create an LPA or an Enduring Power of Attorney (EPA) while they had capacity. In the absence of an LPA or EPA, no one has automatic legal authority to act on the individual’s behalf. As a result, a family member, friend, or other interested party must apply to the Court of Protection to be appointed as a Deputy, who can be granted the legal authority to make decisions and manage the individual’s affairs in their best interests. A deputy’s powers are determined by the Court and are subject to ongoing supervision and reporting requirements.
Why is a Lasting Power of Attorney preferable to a Deputyship Order?
While Deputyship Orders provides an important safeguard for vulnerable individuals, it can be a lengthy and more costly process. The application may take several months to be approved, and Deputies must comply with annual reporting obligations. By contrast, an LPA allows individuals to choose who will act for them and gives attorneys authority to step in when required, avoiding the need for court proceedings.
How can we help
Making an LPA is a proactive step that gives peace of mind and ensures your affairs can be managed by people you trust. If an LPA is not in place and capacity is lost, a Deputyship application may be necessary to obtain legal authority to act. For this reason, it is generally advisable to consider creating LPAs well before they are needed.
If you would like advice on creating a Lasting Power of Attorney or applying for a Deputyship Order, our Court of Protection and Private Wealth team can help. Please contact us to speak to a member of our team.
