Who should look after your best interests when you can’t?
Date: February 25, 2018 by IDU
There was a lot of news coverage recently following remarks by retired Court of Protection judge Denzil Lush. Mr Lush expressed his personal concerns about the ‘risks’ posed by the creation of a Lasting Power of Attorney (LPA), claiming they were fraught with opportunities for abuse and that he personally would prefer the alternative of a Deputyship.
So why did his comments make the headlines and what’s the background to the debate about which is the better option? We are all apparently living longer, but for many those final years are cursed by a deterioration in memory and mental capacity – through Alzheimer’s or dementia. The general advice is that it’s prudent to make arrangements that allow you to choose in advance the people you want to make decisions on your behalf when you lack the mental capacity to make them yourself.
That’s usually done through what’s called a Lasting Power of Attorney (LPA): a powerful and binding legal document that can be made at any time by anyone over 18 years old. There are two kinds:
one covering just financial affairs and the other covering health and welfare matters. One can be made without the other and they don’t come into effect until registered with the Office of the Public Guardian.
The person making the LPA is legally referred to as the ‘donor’. The people (or firms and other entities like a solicitor or a trust corporation) the donor chooses to make decisions on their behalf are known as ‘Attorneys’.
Being an Attorney under an LPA is a role that carries immense responsibilities and represents an investment of tremendous faith and trust by the donor. If you have not made an LPA and then lose capacity to manage your affairs, an application has to be made to the Court of Protection for someone to be appointed to fulfil that role.
The person the court appoints is known as a ‘Deputy’ and the individual whose affairs are being managed is often referred to as ‘P’. Regardless of whether the appointee is an Attorney or a Deputy, they must always demonstrably act in the donor’s best interests at all times. If they don’t, the court can step in and remove them.
The key differences between an LPA and a Deputyship are Choice, Complexity/Cost and Safeguards.
With an LPA, you can choose who you would prefer to act as your Attorney. That of course does mean that you have to choose wisely (if your Attorney of choice hasn’t managed their own finances very well, they are unlikely to do any better with yours). With a Deputyship, you have no say at all – the court appoints a Deputy on your behalf.
A Lasting Power of Attorney can be created using the forms available on the gov.uk website. If you seek professional help, there will be a fee to prepare those documents which normally starts at around £500 plus VAT. There is also a court fee to be paid which is £82 per LPA to be registered. However, once those sums are paid that’s it – no more expense.The forms for an application for a Deputy are significantly more complicated and many applicants need help which often costs in the region of £4,500 plus VAT plus the court fee which is normally £320. Deputies may also require professional assistance with preparing the required annual report and accounts, which of course normally attracts a fee. There are also ongoing costs in having to make an application to the court for interim orders (for example when wanting to sell a house). The annual ‘running costs’ of a Deputyship could easily be thousands of pounds per year.
Financial abuse can and does happen under both Deputyships and LPAs. In the cases involving a Deputy, financial abuse may come to light during the supervision visit or on review of the annual report by the court. In cases involving a Lasting Power of Attorney, concerned third parties may have raised concerns. In practice, we have found that most cases of financial abuse are uncovered when a nursing or care home advises that their fees have not paid.It is true that a Deputyship does provide a more structured and supervised regime than an LPA, including formal safeguards such as a ‘surety bond’ that will pay out in the event that funds are misused, regular ‘support’ meetings between the Deputy and a court appointed visitor and usually a requirement for an annual report that is reviewed by the court. However, this is achieved only at a significantly greater cost than an LPA.
Despite Mr Lush’s arguments, an LPA, if arranged and administered diligently and correctly, is still a powerful and effective tool to ensure peace of mind. The key really is that in making an LPA you are able to choose who manages your affairs. It is up to you therefore to be certain you’ve made the right choice of individual to do that. An Attorney does not have to be a family member or friend. Many will appoint a professional attorney to act for them precisely because they do not feel that their family or friends will be able to make the impartial decisions in their best interests that are required.
If you have concerns about an Attorney or Deputy speak to lawyers with specialist Court of Protection advisors or report your worries to the Court of Protection:
- Telephone: 0115 934 2777
- Text phone: 0115 934 2778
- Web: https://www.gov.uk/report-concern-about-attorney-deputy