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Financial Affairs: How does a Deputyship differ from an LPA?

Our People - Lilian Efstathiou
20 September, 2023

In simple terms, a person, with the mental capacity to do so, can grant a Lasting Power of Attorney (LPA) to another person allowing them to look after their finances (both while they have capacity and after they have lost capacity). If they lose the capacity to control their own finances without having made an LPA, then the only way someone can help them with their finances is to apply to court to be appointed as a Deputy.

Life can bring unexpected challenges, including situations where we or our loved ones lose the mental capacity to manage their financial affairs due to conditions like dementia, mental illness or brain injuries.

When circumstances leave individuals unable to handle their own financial affairs, there are legal mechanisms available to protect their financial stability, such as Deputyship and LPAs. 

What is the difference between a Deputyship and a Lasting Power of Attorney?

Deputyship allows the court appointed deputy to make financial decisions on behalf of someone who has been assessed as lacking capacity to manage their own finances. This process involves making an application to the Court of Protection and only becomes necessary where an individual hasn’t set up an LPA before they lost capacity to manage their finances.

In contrast, an LPA is a legal document that allows an individual to appoint one or more trusted persons to manage their finances in case they become incapacitated in the future. An LPA is only an available option to people who still have capacity to manage their property and financial affairs.

What the advantages of a Lasting Power of Attorney?

Granting an LPA to someone you know and trust is the best way safeguard your financial future when planning for a time when you might not be able to take financial decisions yourself. You get to choose who has the power, you can place restrictions on the attorney’s powers and it’s cheaper to set up an LPA than it is to later have a family member need to apply to court to be appointed a Deputy.

What the advantages of a Financial Deputyship?

In certain situations, applying for financial Deputyship is essential, despite the costs. The benefits include protecting the individual’s financial interests, ensuring decisions are taken in their best interests, and establishing a legal framework for how financial decisions will be made on their behalf. The deputy takes on responsibilities such as managing the incapacitated person’s property, paying bills and paying for care costs, making appropriate investments, and ensuring the individual’s financial security.

A Deputy will be subject to certain obligations following their appointment, such as keeping accounts and keeping the protected person’s money separate from their own. Supervision is provided by the Office of the Public Guardian and purchasing an Insurance Bond is required to protect the incapacitated person’s finances.

Can you have a deputy and a lasting power of attorney?

While it is possible for you to have an LPA for finances and a Deputy for welfare decisions (or vice versa) you cannot have both an LPA and a Deputyship in place for the same issue. If you have a valid LPA, a Deputyship is not needed.

What is the Deputyship Process?

When pursuing a Deputyship for property and affairs, the Court of Protection will consider a paper-based application and will ascertain whether the proposed Deputy is suitable and if the application is necessary. The process involves several steps, including: –

  • preparing the application
  • providing financial information
  • notifying relevant parties, and
  • providing proof of the relevant individual’s lack of capacity, usually by way of a capacity assessment.

The court appoints a deputy if they are deemed capable of acting in the best interests of the incapacitated individual.

Navigating the process of applying for deputyship can be stressful making it advisable to seek assistance from experienced solicitors who specialise in Court of Protection matters. Solicitors can provide valuable guidance, help you to complete necessary paperwork, gather relevant evidence, and submit the application. Their expertise simplifies the application process and reduces the risk of delays.

This article has focused on financial affairs LPAs and Deputyships. You can also put in place an LPA to allow someone to take welfare decisions for you. It is rare for the court to appoint a Deputy to take decisions regarding welfare matters.

At GN Law, we specialise in providing expert guidance and support for deputyship and LPA matters, ensuring that your loved one’s financial well-being remains safeguarded. Our Court of Protection team specialise in deputyships, while our Power of Attorney solicitors can assist you with setting up an LPA. To learn more about applying for deputyship or LPA, please speak with our team on 020 8492 2290.

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