Lasting Power of Attorney for Property and Financial Affairs
- Setup and Authority:
- Set up by the individual (the donor) while they still have mental capacity.
- The donor appoints one or more attorneys to manage their financial and property affairs if they lose capacity.
- The attorney can act as soon as the LPA is registered, with the donor’s permission, or when the donor loses mental capacity.
- Decision-Specific Example:
- Managing Bank Accounts: The attorney can manage the donor’s bank accounts, including transferring money between accounts, paying bills, and ensuring regular expenses are covered.
- Property Management: If the donor owns property, the attorney can handle matters such as collecting rental income, paying for maintenance, or even selling the property if needed to fund the donor’s care.
- Investment Decisions: The attorney can make investment decisions on behalf of the donor, ensuring that their savings and investments are managed in line with the donor’s best interests and risk preferences.
Deputyship for Property and Financial Affairs
- Setup and Authority:
- Applied for when the individual has already lost mental capacity and did not set up an LPA in advance.
- A family member, friend, or professional must apply to the Court of Protection to be appointed as a deputy.
- The court supervises the deputy and sets out their responsibilities and limits.
- Decision-Specific Example:
- Managing Bank Accounts: Similar to an LPA, the deputy can manage the individual’s bank accounts, including paying bills and transferring money. However, they must often provide regular reports to the Court of Protection on these activities.
- Property Management: The deputy can handle property matters, but significant actions like selling a property may require specific approval from the Court of Protection. For instance, if the incapacitated person’s house needs to be sold to pay for care home fees, the deputy would need to obtain court approval before proceeding.
- Investment Decisions: The deputy can manage investments, but they might need to adhere to specific court guidelines and may need court approval for certain types of investments, ensuring decisions are in the best interests of the incapacitated person.
Key Differences
- Proactive vs. Reactive: An LPA is proactive, set up by the individual before they lose capacity. Deputyship is reactive, applied for after capacity is lost.
- Court Involvement: LPA involves minimal court involvement, whereas deputyship requires application to and oversight by the Court of Protection.
- Control and Choice: With an LPA, the individual chooses their attorney(s). With deputyship, the court decides who the deputy will be.
- Speed and Complexity: Setting up an LPA is usually quicker and simpler than obtaining a deputyship, which can be a lengthy and complex process.
- Reporting and Supervision: Deputies generally have stricter reporting requirements and closer supervision by the court compared to attorneys under an LPA.
Decision-Specific Comparisons
- Selling Property:
- LPA: The attorney can sell the property relatively straightforwardly, following the donor’s best interests and possibly without court approval.
- Deputyship: The deputy may need to seek court approval to sell property, adding time and complexity to the process.
- Paying for Care:
- LPA: The attorney can arrange and pay for the donor’s care needs, such as hiring carers or paying care home fees, based on the donor’s financial situation.
- Deputyship: The deputy can also arrange and pay for care but may need to provide detailed reports and justifications to the court for these expenses.
In summary, while both an LPA for Property and Financial Affairs and a Deputyship allow for management of an individual’s financial matters, an LPA offers more flexibility and is generally quicker to implement, whereas deputyship involves more court oversight and can be more complex and time-consuming to establish.
