A retired judge has suggested that people wishing to appoint others to look after their affairs in the event of their becoming incapable of doing do themselves would be better protected by a Deputy of the Court of Protection than by a relative or friend acting under a Lasting Power of Attorney (‘LPA’).
Denzil Lush, who before retirement was the senior judge in the Court of Protection, said that in most of the cases which came before his court involving abuse of the powers conferred by an LPA, the personal exercising the power had been a close family member.
There are two types of LPA, one relating to health and welfare and the other to financial affairs. The first of these enables persons appointed as attorneys to make decisions on matters such as accommodation, diet and medical treatment, while the second enables the appointee to decide on matters such as buying or selling a house, operating bank accounts, dealing with tax matters and claiming benefits.
People wanting to help relatives or friends who become incapable but who do not have an LPA must apply to the Court of Protection to appoint a Deputy – often a solicitor – to act on their behalf. But the process is time-consuming and involves considerably more expense than an LPA.
An LPA can be set up without professional assistance by going to www.gov.uk and searching on Powers of Attorney, though the forms and guidance available from this site are quite complicated.
It is recommended that when completed, the LPA should be registered with the Office of the Public Guardian, which is the administrative arm of the Court of Protection. The registration fee is £82. When registered, banks and insurance companies and other financial institutions will treat the attorney as if they were the person who gave the power.
By contrast, the application fee for a deputyship is £400 and there is an annual fee of at least £320 in the first year but falls to £35 in subsequent years. In addition, new Deputies must pay an ‘assessment’ fee to the court, which needs to be satisfied about their suitability.
If, as is usually the case, the deputy is a professional, then no application fee will be payable to the Court but professional fees will be payable which could amount to several hundred pounds.
Denzil Lush estimated that one in eight attorneys abuse their position, and that in these cases a deputy would have provided superior protection of the interests of the donor of the LPA. For most people, however, it remains good advice to sign an LPA, perhaps when making a Will. The important thing is to take great care in choosing who to appoint.