You can apply for a deputyship for someone if they ‘lack mental capacity’. This is a situation where your loved one cannot make a decision for herself at the time it needs to be made.
A lasting power of attorney (LPA), on the other hand, is a way of giving someone suitable whom you trust the legal authority to make decisions on your behalf if you lose mental capacity at some point in the future or, indeed, if you no longer wish to make decisions for yourself.
You appoint an Attorney
You can only appoint an Attorney under an LPA if you have the mental capacity to understand what you are doing at that time. The process for assessing a person’s capacity is detailed within the Mental Capacity Act 2005 and its code of practice. It is complex but, in summary, you need to be able to understand relevant information, retain that information in your mind, weigh it up and then communicate your decision to appoint an Attorney.
A Deputy is appointed by the Court
In contrast, a Deputy is appointed by the Court of Protection to manage the property & affairs and/or the personal welfare of someone who lacks the capacity to make decisions for themselves.
Same responsibilities but differing supervision
A Deputy and an Attorney have the same duties and responsibilities under the Mental Capacity Act. However a Deputy is subject to vigorous ongoing supervision while an Attorney is not.
A Deputy is required to complete an annual report to the Office of the Public Guardian (OPG) and must account for all expenditure made on behalf of the person who has lost capacity. A Deputy is also required to maintain an annual security bond (a type of insurance against financial loss). They must also pay an annual fee towards the cost of their supervision.
An Attorney appointed does not have reporting requirements to the OPG, is not subject to the same level of supervision and there is no requirement for a security bond.
Why the difference in supervision?
Famously, retired Senior Judge Denzel Lush in a recent BBC Radio 4 Today Programme commented that he has more faith in Deputyships than Attorneyships because of this differing level of supervision.
Deputies are appointed without the consent of the person concerned because they lack capacity. Appointing a Deputy is a significant decision that impacts on most aspects of the individual’s day-to-day life. It is difficult to think of other situations in which the state would make such an important decision concerning someone’s individual property & financial affairs and personal welfare. Thus, it makes sense that the Court will seek to ensure the person appointed as Deputy is properly supervised and kept under review.
Powers of Attorney have their place
The additional supervision of Deputies inevitably leads to increased cost and effort. Even completing the annual OPG report can be stressful, especially for lay Deputies that often lead busy lives, juggling their job, providing care, looking after their family and being responsible for another person’s affairs.
More importantly though, for many people, the ability to appoint someone suitable whom you trust to deal with either your property & financial affairs and / or your health & welfare affairs can be reassuring. Clearly, this needs to be done while you have mental capacity, though it may be possible to appoint an Attorney even after a diagnosis of dementia, as it is decision-specific as to capacity i.e. just because someone can no longer handle their affairs does not exclude the possibility of someone understanding the impact of having someone they trust handle their affairs. It can be a comfort having an LPA in place knowing that your interests will be taken care of by a loved one, e.g. your child.
Risk of abuse
It is important to be aware of the risk of abuse by an Attorney. The current Lasting Powers of Attorney (in place since 2007) system has more safeguards than the previous system (Enduring Powers of Attorney). It is important for your legal adviser to discuss safeguards with you. For example, you may notify other family members or friends (who are not named persons to be notified of an application to register the LPA) of the existence of the power, why you have chosen the attorney and how you intend it to be used. This may help to guard against the possibility of abuse by an attorney and may also reduce the risk of conflict between family members at a later stage.
In order to minimise the risk of abuse, it is best that an LPA be made while in full charge of your mental capacity. You are then able to weigh up the abilities of potential attorneys and choose someone suitable and trustworthy. In the absence of family or friends who are able to do this, then organisations such as the Barr Ellison Trust Corporation could potentially provide the necessary Attorneyship skills and experience needed.
Other Trusts & Estates Articles
The benefit of an after death Deed of Variation over you just making a gift is that it can be read back as if the deceased made the gift themselves for both Inheritance Tax purposes [...]
Witnessing Wills remotely: when and how may this be done? When is it appropriate to witness a Will remotely?
Your HMRC self assessment online tax return deadlines - a brief overview how it works each year.
Five Steps to Signing a Will - giving reassurance that everything will be in order for our loved ones when we pass on.
Some of the more important actions to be taken during the period after someone has died as a pre-cursor to probate.
The introduction of the new Residence Nil Rate Band (RNRB) began in April 2017 and is ongoing. It is an additional inheritance tax allowance ...
Our Family Law and Trusts & Estates teams joined forces with Rathbones Cambridge during November to provide a wealth management seminar for our clients and partners.
You can apply for a deputyship for someone if they ‘lack mental capacity’. A lasting power of attorney is a way of giving someone suitable whom you trust the legal authority to make decisions on [...]
In the recent case of Ubbi v Ubbi 2018, the High Court has given useful guidance with regard to how the Section 3 factors under the Inheritance (Provision for Family and Dependants) Act 1975 should [...]
Some applicants for Powers of Attorney may be due a small refund ...