24.6 million people in the UK – 38% of the population – know a family member or a close friend living with dementia (Alzheimer’s Research UK). Globally, it is anticipated that the number of people living with dementia will increase from 50million in 2018 to 152million in 2050, an increase of 204% (WHO).
Have you been able to give thought to how you would like your affairs managed if, for any reason, you couldn’t make decisions for yourself? “Don’t put off until tomorrow what you can do today” is sage advice and particularly so when it comes to planning for the future and thinking about who you would rely on if you needed practical support.
The Mental Capacity Act 2005, which came into effect on 1 October 2007, introduced two types of Lasting Power of Attorney (LPAs) – so called because they last beyond the onset of incapacity (an ordinary power of attorney is revoked by the subsequent incapacity of the person who put it in place).
Simply put, a power of attorney is a formal arrangement, undertaken by deed, whereby one person (the donor) entrusts to another person(s) (the attorney) authority to act in their name and on their behalf.
A Property and Financial Affairs LPA - allows your attorney to deal with your property and finances. This can include selling property, dealing with bank accounts, accessing your financial information and dealing with your tax affairs. This type of LPA can be used even if you still have the capacity to make decisions, but only with your authority, unless you include a restriction that your attorney is only able to make decisions when you lack mental capacity (which we would not normally recommend). Should you lose capacity, in the absence of a properly appointed attorney, bank accounts (including joint accounts where the other account holder has lost their mental capacity) and other savings will be frozen. Access to the funds will only be possible on the appointment of a deputy by the Court of Protection. This involves a more complicated and usually expensive procedure, which is avoided by the appointment of an attorney.
A Health and Welfare LPA - allows your attorney to make welfare and health care decisions on your behalf, but only if you no longer have the capacity to make such decisions yourself. These decisions can include where you should live, decisions regarding medical treatment (including life sustaining treatment) and your day-to-day care. Hospitals and care homes are increasingly asking for Health and Welfare LPAs.
Both types of LPA must be registered with the Office of the Public Guardian before they may be used and this process can take months to complete. We normally recommend registering the LPAs sooner rather than later. This will avoid a delay in your attorney being able to act, should the need arise.
However, not everyone is able, for whatever reason, to plan ahead. If there is no existing LPA in place and someone finds themselves in a position where they require support to manage their affairs but lack capacity to prepare an LPA now, an application for the appointment of a deputy would need to be made to the Court of Protection.
A deputy may be a relative or a friend, a professional (such as a solicitor) or a trust corporation (for example, our firm’s Trust Corporation acts as deputy for many of our vulnerable clients). If the Court approves of the proposed deputy, a Deputyship Order will be made appointing them to this role. The order authorises the deputy to make decisions on behalf of the vulnerable person and will set out the parameters of that authority.
There are two possible types of deputy and they deal with very different decisions. The appointment of a property and financial affairs deputy is quite common, while the appointment of a personal welfare deputy is quite rare, as the Court prefers to make one-off decisions in relation to health and welfare decisions, rather than delegating that authority to a third party.
An application for deputyship will usually take longer than preparing an LPA and whilst any views you can express should be taken into account, you would not be in control of exactly who is appointed as deputy (this decision ultimately rests with the Court). However, there are further factors which can offer peace of mind.
For example, a deputy is required to account annually to the Office of the Public Guardian, which has a duty to supervise deputies. Attorneys are not generally subject to this requirement (although an instruction to submit regular accounts to, say, an independent party could be included in a property and affairs LPA). A deputy is also required to give security by way of a formal bond arranged with a commercial provider, to cover the possibility of them acting improperly and causing any loss to your estate. If attorneys act improperly causing loss to your estate, usually a civil claim for compensation or damages will need to be considered.
The ability to apply to the Court for the appointment of a deputy can, therefore, provide reassurance that your affairs can still be looked after and managed should you not be able to prepare an LPA, but become unable to manage your affairs. However, serious consideration should be given to preparing an LPA whilst you can.