What happens if I can't manage my own affairs?
Many of you will be aware of Kate Garraway, the well-known presenter on Good Morning Britain and lots of you will have watched her documentary ‘Kate Garraway: Finding Derek’, which highlights the practical and emotional struggle loved ones can face when they are unprepared for the worst.
As well as the heartbreak and suffering Kate and her children had to face following her husband becoming incapacitated due to contracting Covid-19, this was only compounded because Derek didn't have a Lasting Power of Attorney. Kate couldn’t access his bank or credit card accounts, their joint savings, nor refinance the mortgage. When the family’s mobile phones broke, she was charged almost £900 for replacement handsets that would have been free had her husband, the account holder, been able to sign the paperwork. The knock-on effect was serious: she had to rely on friends’ financial support. But this is not an isolated case, with normal, every day people facing the same struggles on a daily basis.
Indeed, Heather Bateman shared her story on The One Show some years ago, to talk about the struggles she had to endure when her husband Michael sadly fell into a coma following an accident.
As well as planning for the unexpected, many of us are living much longer than ever before, advancing well into our eighties and even older. But sadly with this increase in life expectancy is the increased risk of developing Alzheimer's dementia. There are currently 944,000 people with dementia in the UK. This will increase to over one million by 2030 and over 1.6 million by 2050.
1 in 3 people born in the UK this year will develop dementia in their lifetime.
What's the difference between a Deputyship and Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint one or more people you trust to manage your affairs and make decisions on your behalf. These people are known as attorneys or donees. When you make an LPA, you are known as the donor. And so, making an LPA gives you the freedom to choose who you would want to appoint to manage your affairs.
Deputyship, on the other hand, is a way which allows someone to legally be allowed to make certain decisions on another's behalf if that person no longer has the mental capacity to make those decisions for themselves. Deputies are appointed by the Court of Protection. This means that a person must apply to the court if they wanted to become your deputy and the Court will then decide if they were suitable based on the application and information provided.
And so, if you were to lose capacity and could no longer manage your affairs, your loved ones would have to make an application to the Court of Protection for an individual known as a deputy to be appointed to manage your affairs. Although a deputy can be appointed to make property and financial affairs decisions or health and welfare decisions, in a similar way to an LPA attorney, the Court may choose to appoint someone you wouldn't have wanted and depending on the circumstances, they may choose to appoint a professional who will of course charge fees throughout the whole time they are appointed.
Another major difference, between attorneys and deputies arises in the potential scope of their powers, whether in respect of property and financial affairs or health and welfare matters. Attorneys appointed in a Lasting Power of Attorney have wide powers as to how they can deal with the property and finances of the donor or make decisions regarding their health and welfare, whereas the powers of a deputy tend to be more restricted.
The process of applying to the Court of Protection is complex, time-consuming and expensive, which could be avoided by making sure you prepare a Lasting Power of Attorney.
A person on whose behalf the Court of Protection appoints a deputy is commonly referred to as the 'protected person'. The person who is appointed by the Court to manage the 'protected persons'.
A application for Deputyship is made by the proposed Deputy who applies to the Court of Protection to be appointed. A Deputyship order can only be made on behalf of another person if they already lack mental capacity. You cannot make an application for Deputyship in advance of someone losing their mental capacity. The person for whom the Deputyship order is being made does not need to consent to the application, but they do need to be notified as part of the legal process.
Appointing a Deputy is not a quick process. If you lose mental capacity without an LPA in place, the court application takes around 4-6 months. In the meantime no-one will be able to make decision or access your funds to pay bills or care fees. This can cause problems should you require nursing care or if your proposed Deputy needs to sell property or investments to release funds.
An LPA is significantly cheaper than a Deputyship, with legal fees coming in at around half the cost. In addition, it costs £82 to register an LPA, whereas the court fee alone for making a single Deputyship application is £385. Once a Deputy has been appointed there are also annual supervision fees of approximately £325.
What does a deputy have to do?
If you are thinking of becoming a deputy and making decisions on behalf of a person with dementia, it is important to understand the duties of this role. You will have to:
act in the person’s best interests – this includes thinking about the person’s past and present wishes and feelings
make decisions carefully and with as much knowledge as possible – this may involve talking to the person, to people who know them or to professional experts
not take advantage of the person with dementia – for example, using something they own for yourself or for your own profit
not give your duties to someone else, unless your deputyship says you can – this means that only you can make the final decision on behalf of the person. However, you can talk to other people about it and get advice
act in good faith – this means acting with honesty and integrity
respect the person’s confidentiality – this means not sharing details of the person’s finances, property and health conditions, unless you need to in order to act in their best interests
follow the instructions of the Court of Protection.
If you are a deputy for property and affairs, you also have a duty to:
keep financial accounts
keep the person’s money and property separate from your own – for example, by using separate bank accounts.
The level of ongoing supervision of a Deputy is very different to an Attorney. There are rigorous 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.
It is completely understandable that most people do not want to think about what would happen to them should they ever fall ill or be involved in an accident, and be left unable to manage their own affairs or make their own decisions. However, planning in case the unexpected should happen is a sensible precaution and preparing a Lasting Power of Attorney and having a choice over who manages your affairs is far easier, cheaper and less stressful for all those concerned. Talk to us today if you'd like to find out more.