Making the right choice: power of attorney or Court of Protection?

Making the right choice: power of attorney or Court of Protection?

What are the options for people who become unable to manage their own affairs? Philip Baldwin of Bray & Bray solicitors explains some of the key differences between a lasting power of attorney and the Court of Protection.

Lasting power of attorney agreements (LPAs) are a common way for people to choose who can support them in making decisions if they become unable to manage their own affairs. However, LPAs made the headlines earlier this year when a retired senior Court of Protection judge cast doubt on their use, citing examples of abuse.

The Court of Protection is another alternative. However, unless you understand what’s involved, it can be difficult making the right choice.

Lasting power of attorney

An LPA allows you to appoint a person (or people) to make decisions on your behalf should you become unable to do so. There are two types: one for property/finance and one for health/welfare issues. Your attorney has a legal responsibility to act in your best interests. There is rarely any ongoing court involvement, although the Office of The Public Guardian can be called upon to investigate concerns.

Costs for setting up an LPA vary. You can do it yourself online for free (other than the registration costs) but if you want to use a lawyer than a ballpark figure would be in the region of £300 plus vat for a single LPA or £425 plus vat for a pair of LPAs i.e. one for finance and one for health.

An LPA must also be registered before use, incurring a fee of £82 from the Court of Protection for each power of attorney. There are rarely any ongoing costs once registered. Because an LPA can be set up and registered in advance, it can be used as soon as it is needed.

The Court of Protection

If you lose mental capacity and don’t have an LPA, the Court of Protection can appoint someone to act as your deputy. Again, there are two types: one for property/finance; the other for health/welfare decisions.

Anyone can apply to be your deputy, although this is often a relative. If successful, they receive an order from the court telling them what they can and can’t do. Again, they must act in your best interests and prepare annual reports for the court detailing all their decisions and transactions, such as paying bills.

Deputies are supervised by the Office of the Public Guardian and may be visited by a Court of Protection representative to check that they are carrying out their duties properly.

This option is usually more expensive, with application fees of £400 for a single deputy or £800 for a pair of deputies. There is also a £100 assessment fee if your deputy has not been one before and £500 if the court decides that they need a hearing. In addition, the court will require a financial bond if the deputy is managing finances.

Other annual costs include:

  • £320 for general supervision by the court; or

    Philip Baldwin of Bray & Bray solicitors

    Philip Baldwin of Bray & Bray solicitors

  • £35 for minimal supervision (if managing less than £21,000)

With both LPAs and the Court of Protection, some or all of the court fees may be waived or reduced in certain circumstances.

Because Court of Protection deputies aren’t set up in advance, it usually takes longer before they can make decisions on your behalf.

Ultimately, the choice often comes down to trust. If you feel confident that your attorney(s) will act in your best interests, the reduced cost and administration make LPAs a more attractive option for many people. However, for those without someone that they trust, the Court of Protection offers greater security and peace of mind. Whichever route you consider, it’s always worth consulting a professional to obtain objective, expert advice.