A Guide to LPAs, Court of Protection and Deputyship

A GUIDE TO LPAS, COURT OF PROTECTION AND DEPUTYSHIP 

According to a government website, LPAs are as important as having a will for ensuring your wishes are followed, but while an estimated 40% of the adult UK population has a will less than 1% has an LPA.

What is a Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) is useful tool when people become incapable of running their own financial affairs.

An LPA allows someone, of the donor’s choice, to step in and take control of the donor’s finances.

Because of the great power the LPA gives them, attorneys are often trusted friends or family of the donor.

However, where attorneys abuse this power, measures must be taken to protect the donor.

This is particularly important when the donor cannot protect themselves or even complain about the way their attorney is acting.

Adults aged 18 or over with the capacity to make decisions can make provision for the event that sometime in the future they may lack capacity to make certain decisions. This can be done by giving another person Lasting Power of Attorney (LPA) - the authority to act on their behalf or by making advance decisions to refuse medical treatment.

People given formal powers under LPA to make decisions on behalf of adults who lack capacity are bound by the Mental Capacity Act and its Code of Practice.

They have a statutory responsibility to act within the limits of the powers given to them always to act in the person's best interests Adults who lack capacity and do not have such formal arrangements and require significant decisions to be made may be subject to a best interest meeting or the issue may need to be taken to the Court of Protection.

The court may appoint a deputy to act as decision maker or make a declaration about what is in the person's best interests.

The Problems of LPAs

One in three people over 65 will develop dementia.

You can only register a LPA  while you still have mental capacity - after that, it's too late.

So it's important to act sooner rather than later.

Following an FOI request by Canada Life, the Ministry of Justice has confirmed there has been a 26.5% reduction in the number of lasting power of attorneys (LPAs) registered in the 2020/21 tax year compared to the previous year. In total, 636,628 registrations were completed, split between 282,883 health and welfare and 353,745 property and finance LPAs.

This compares to 866,272 registrations in the previous tax year (2019/20) split between 382,130 health and welfare and 484,142 property and financial, which to date is the peak year for registrations.

There are a number of people who will need to deal with problems in not having a Lasting Attorney in place.  

Two Kinds of Lasting Powers of Attorney

There are two types of LPA: personal welfare and property and affairs.

LPAs are legal documents and are only valid if completed on the statutory form LPAs must be signed by the donor LPAs should normally name people who should be informed when it is to be registered LPAs must contain a certificate completed by an independent third party LPAs must name the person (or persons) who is to act as attorney LPAs must be registered with Office of Public Guardian (OPG) before they can be used If registered some time ago and not used, the attorney should inform the OPG when they start to act under it LPAs may have restrictions or conditions.

There are some decisions that can never be delegated to an attorney.

 Attorneys should never be a professional/paid carer who is or is likely to be involved in the adults’ care or treatment - the only possible exception being that they are a close relative.

Attorneys can only make decisions prescribed in LPA, and must carry out the donor's instructions, i.e. they cannot assume decision-making for any other matters They may be consulted, if appropriate, over other matters un-less there are explicit instructions not to Property and affairs attorneys should keep accounts.

An LPA regarding finance would be immediately effective unless the person specified at the time that this should not occur until they have lost capacity to make decisions in this area.

Enduring Power of Attorney

An enduring power of attorney (EPA) is a document that appoints someone (‘an attorney’) to help manage your property, money and financial affairs.

Your attorney will be able to help you make decisions or make decisions on your behalf if, for example, you have an accident or become ill and cannot make a certain decision at the time it needs to be made (you ‘lack mental capacity’).

The EPA was replaced with the property and financial affairs lasting power of attorney (LPA) in October 2007.

If you made an EPA that was signed and witnessed before October 2007 you can either:

•              continue to use it

•              cancel it and set up a property and financial affairs LPA

•              You can also make a health and welfare LPA             

•              You cannot change an existing EPA

The Office of the Public Guardian

The Public Guardian is responsible under the Mental Capacity Act for:

•              supervising deputies appointed by the Court of Protection.

•              keeping registers of deputies, Lasting Powers of Attorney, and Enduring Powers of Attorney; and

•              investigating any complaints about attorneys or deputies.

Court of Protection - What does the Court of Protection do?

The Court of Protection is the specialist court for all issues relating to people who lack capacity to make specific decisions.

The Court can make decisions and appoint deputies to make decisions about someone’s property and financial affairs or their healthcare and personal welfare.

Under the Mental Capacity Act, the Court has the power to:

•              make decisions about the personal welfare or property and financial affairs of people who lack the capacity to make such decisions themselves.

•              make declarations about a person’s capacity to make a decision, if the matter of whether they can make a decision can-not be resolved informally.

•              make decisions in relation to serious medical treatment cases, which relate to providing, withdrawing or withholding treatment to a person who lacks capacity.

•              appoint a Deputy to make ongoing decisions on behalf of a person who lacks capacity, in relation to either the person’s personal welfare or property and financial affairs; and

•              make decisions about a Lasting Power of Attorney or Enduring Power of Attorney, including whether the power is valid, objections to registration, the scope of Attorney powers and the removal of Attorney powers.

The Court of Protection has the power to:

•              decide whether a person has capacity to decide for them-selves

•              make declarations, decisions or orders affecting people who lack capacity to make decisions

•              appoint deputies to make decisions for people who lack capacity

•              decide the validity of LPAs and remove deputies or attorneys who fail to carry out their duties appropriately

Who can make applications to the Court of Protection?

Anyone can make an application if they feel they have just cause. Usually people making applications will be:

•              vulnerable adults who feel they have been unfairly determined as lacking capacity to decide

•              family members who disagree amongst themselves or with an agency about what's in the best interests of the person lacking capacity

•              family or friends who wish to seek authority to manage the affairs of a person who is lacking capacity to make decisions about their own affairs

•              NHS Trusts which need to make a major decision about serious medical treatment for a person who lacks capacity

•              local authorities which have concerns about major decisions affecting the person's welfare

The court can appoint deputies who are adults (18+ years who manage either the person lacking capacity's property and affairs or welfare decisions. A deputy could be a family member or a professional (though not a paid carer directly involved in the care or treatment of the person)

The scope and limits of a deputy's authority will be clearly determined in the order of appointment

Deputies must act in accordance with all the act's statutory principles, especially best interests and have regard to the code of practice.

However, it may be necessary to apply to court for an order, if the enduring power of attorney or a lasting power of attorney does not permit the attorney to make the decision in question (for example there may be restrictions or conditions in the power); or if the attorney is prevented from doing something by the Act or any other law (for example the Act does not allow the attorney to make a will on behalf of someone else). In such circumstances, the attorney will need to apply to court.

What Are the Fees for a LPA or a Court of Protection Applications?

It costs £82 to register an LPA unless you get a reduction or exemption.

If you are too late to make a LPA application, you must pay a fee to apply to be a deputy.

When you apply you must pay a £400 application fee. Send this with your application form.

You need to pay the application fee twice if you’re applying to become both types of deputy.

You will also need to pay £500 if the court decides your case needs a hearing.

The court will tell you when you need to pay this. Make all cheques payable to ‘HM Courts and Tribunals Service’.

After you have been appointed you must pay an annual supervision fee depending on what lev-el of supervision your deputyship needs. You will pay: £320 for general supervision £35 for minimal supervision (if you’re a property and affairs deputy managing less than £21,000)

Your annual supervision fee is due on 31 March for the previous year. You’ll also need to pay a £100 assessment fee if you’re a new deputy. The Office of the Public Guardian will tell you how and when to pay your assessment and supervision fees.

You may be able to claim a refund of your fees in certain situations. Before the Court of Protection releases a deputyship order, it requires the deputy to put in place a security bond. The level of the bond is set by the Court and will depend on the extent of the Person's net assets, income and outgoings and the level of experience of the deputy.

An annual premium is usually payable from person's funds to cover this important insurance against the deputy ‘turning bad’ (unless person's assets are limited, in which case a one-off premium will be required).

If you use a solicitor the Solicitors Regulation Authority (SRA) sets out the maximum amount a solicitor can charge for Court of Protection work in the UK.

Why are LPAs so Important? 

If you do not have a have a valid LPA in place you may have to apply for a Deputyship order. Although the roles of Attorney and Deputy are similar, there are some key differences and they are negative and avoidable.

On top of the costs implications covered above:

1. Mental capacity. LPA Attorneys are appointed in an LPA before mental capacity is lost.  A Deputy is appointed by the courts once mental capacity has gone.

2. Timing.  An LPA can be written and registered in two months when the government department is efficient, and will be completed in advance of the Donor losing mental capacity. Once registered, your Attorneys can act for the person immediately if required, so there will be no delay in accessing funds in a difficult situation. Appointing a Deputy is a slower process. If you lose mental capacity without an LPA in place, the court application takes longer and is more unpredictable.  

3. Selection.  Under an LPA, you are able to choose anyone over the age of 18 to act on your behalf, so long as they too have mental capacity. You can have numerous Attorneys who can act together or independently. With a Deputyship order the court will decide whether the person making the application is suitable to act as your Deputy.  It is possible the court will appoint someone that you would not have chosen to make decisions.

4. Supervision. The level of ongoing supervision of a Deputy is very different to an Attorney. There are strong controls in place to ensure a Deputy is acting correctly, including the submission of an annual report to the OPG accounting for all expenditure made on your behalf. This can be very difficult and stressful for the person appointed as your Deputy. In contrast, an Attorney appointed under an LPA is not required to report to the OPG.

Conclusion

Given the potential costs and delay of a Deputyship application it is critical for many people to have a LPA in place for themselves and their loved ones. While the LPA application remains bureaucratic it is still relatively easy to do and cost effective so please get on with it and avoid the Court of Protection if you can.