What's the Difference Between the Court of Protection and a Lasting Power of Attorney (LPA)?

INTRODUCTION

Specific individuals might be deemed not to have the mental capacity when it comes to estate planning decisions. The Court of Protection and Lasting Power of Attorney (LPA) are two crucial options in these cases.

Both aim to enable someone to act on behalf of another. However, they differ in approach.

In this article, we'll review the main points of similarity and distinction, helping you decide which option is best for your estate planning needs and when.

KEY SIMILARITIES AND DIFFERENCES: OVERVIEW

Similarities

• When an individual does not have the mental capacity to make their own decisions, a Lasting Power of Attorney (LPA) and the Court of Protection are applicable.
• In both circumstances, a nominated individual (or individuals) can act on somebody's behalf.

Key Difference

Aside from the two commonalities highlighted above, here's the critical difference between a Court of Protection and an LPA.

• In the case of a Court of Protection, the Court appoints a deputy to act on an individual's behalf. However, with an LPA, the individual can nominate someone to act on their behalf.

Definition of Deputyship:

Once the Court of Protection appoints a deputy, this role is known as “Deputyship.” Under the Deputyship, the Deputy can make decisions on behalf of the individual lacking mental capacity.

Typically, a Deputy is usually a trusted friend or family member, but you can also appoint a professional such as a solicitor.

The Court will supervise Deputies to ensure the execution of their duties is carried out in the best interests of the person they are making decisions for.

This is unlike an LPA, where the individual chooses their own attorney without the need for ongoing court supervision.

OTHER DIFFERENCES:

There are some other differences between both:

1. MENTAL CAPACITY:

• LPA: An individual nominates someone to act on their behalf while they still have the mental capacity to make an LPA and all related arrangements.

• Deputyship: In this case, the individual already lacks mental capacity. Therefore, it is the proposed deputy who applies to the Court of Protection.

2. LENGTH OF THE PROCESS:

• LPA: It takes around two to three months to register an LPA. This timeframe also includes the period required by the Office of the Public Guardian to process the paperwork and the subsequent waiting period, which allows for any objections to be raised. Once this period has concluded and the LPA is formally registered, the nominated attorney is then authorised to start making decisions on the individual’s behalf with immediate effect, if required. Timing is critical for any individual concerned about the impending loss of mental capacity to ensure there is no delay in their attorney’s ability to act when required.

• Deputyship: It usually takes four to six months to process a Deputyship application - much longer than the LPA process. Until the application is completed, nobody can decide, access funds, or pay any bills/invoices on the individual's behalf.

3. APPLICATION AND ADMINISTRATION COSTS:

• LPA: It is cheaper to nominate an attorney than to have the Court appoint a deputy. The current filing cost is £82 to register each LPA (unless you get a reduction or exemption).

• Deputyship: The application fee for a single Deputyship is £371. If the Court decides your case needs a hearing, you must pay an additional £494. There is also an annual supervision fee of either £35 or £325 a year, depending on the type of Deputyship. Other legal fees may apply for both LPA and Deputyship.

4. SAFEGUARDING AND SUPERVISION:

• LPA: There's no need to report to the Office of the Public Guardian. In this case, it is assumed that the LPA acting on the individual's behalf was nominated by the individual, and the LPA is already serving in the individual's best interests.

• Deputyship: In this case, there's a much higher level of supervision than for somebody with an LPA, and the deputy must submit an annual report to the OPG, which reviews the deputy's decisions yearly. Such decisions will include financial decisions and transactions, which must be clearly laid out in the submitted report. Sometimes, a court may investigate an attorney despite there being no need for official supervision.

HOW TO DECIDE: LOOK AT THE BENEFITS

• Since there is no ongoing court involvement with an LPA, you benefit from a far greater degree of flexibility when appointing an LPA over a court-appointed deputy.

• In the case of an LPA, you're free to nominate whoever you want - somebody you trust inherently to act ethically and competently on your behalf when managing your affairs.

• You're free to nominate several attorneys. It doesn't have to be just one. For example, one LPA could focus on health and wellbeing, whilst another could be responsible for all financial affairs. It's entirely up to you (depending on the LPA you set up).

• You can also benefit from the support of an LPA while you still retain mental capacity. In other words, once the LPA is registered, they can act for you at all times.

Court of Protection:

• If an LPA is not in place, then the Court of Protection is a good way of ensuring an individual is well protected once they lose mental capacity.

• If, for whatever reason, an LPA is declared invalid, then the Court of Protection will intervene and appoint a deputy.

NEXT STEPS:
If you require further information or are unsure about next steps, we'd be happy to arrange an initial 'no obligation' call to help you decide the most appropriate LPA for your needs.

In cases where we believe you need further specialist legal advice, we'd be delighted to put you in contact with one of our partner attorneys who can put together the LPA for you or apply to the Court of Protection on your behalf.

Simply book a free, no obligation callback.

Alternatively, call us on 01233 659 796.

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