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Private Law

Controversial Comments About Lasting Powers of Attorney

Director Frances Davies discusses the controversial comments that have been made about Lasting Powers of Attorney

Some of you may have seen/heard the retired senior judge Denzil Lush’s controversial comments about Lasting Powers of Attorney and why he has vowed to never sign one himself.

So what is a Lasting Power of Attorney? A Lasting Power of Attorney is a document which authorises one or more persons to take action on your behalf. They can be used whist you still have capacity (although only under your specific instructions) and in the event that you lose capacity. The document can only be used during your lifetime and it is separate from a Will. There are two types of Lasting Power of Attorney. The first is a Property and Financial Affairs Lasting Power of Attorney and the second is a Health and Welfare Lasting Power of Attorney.

A Lasting Power of Attorney is a document which authorises one or more persons to take action on your behalf.

Denzil Lush’s comments relate to Property and Financial Affairs Lasting Powers of Attorney and the potential financial abuse that can occur when they are granted. Denzil Lush seems to prefer the alternative deputyship route which involves an individual making an application to the Court of Protection to be able to manage the affairs of someone who lacks capacity to make decisions for themselves. The applicant has not specifically been appointed by the individual who lacks capacity, rather they are nominating themselves to be the proposed deputy and it is for this reason the Court can take between three to six months to grant the order, as they need to ensure the proposed deputy is suitable to act. Furthermore, it is for this reason the Court requires that the deputy, once appointed, must submit annual accounts and a report to the Office of the Public Guardian and also put in place a security bond if there is a problem with money being spent inappropriately.

Whilst the annual report and deputyship bond do safeguard the individual who lacks capacity, provided you make a Lasting Power of Attorney appointing people you trust, it may not be necessary to have these particular safeguards in place.

There are two types of Lasting Power of Attorney. The first is a Property and Financial Affairs Lasting Power of Attorney and the second is a Health and Welfare Lasting Power of Attorney.

Additionally, it is possible to include legally binding instructions in Lasting Powers of Attorney to require that accounts are prepared by a third party or attorney and audited by an independent third party each year if you are keen for a close degree of supervision to be in place.

Below is a brief comparison table summarising some of the differences between Lasting Powers of Attorney and Deputyships:

Property and Financial Affairs Lasting Power of Attorney Property and Financial Affairs Deputyship
You choose who should act as your attorneys. A self-nominated individual applies to the Court of Protection to manage your finances.
There is an £82 fee payable to the Office of the Public Guardian to register the document. There is a court fee of £400 payable to the Court of Protection for a deputyship application.
A Lasting Power of Attorney is usually registered at the Office of the Public Guardian straight away and therefore is available if it is needed at short notice. A deputyship application can take between 3 – 6 months to be processed and approved by the Court. During this period, the individual’s assets are usually frozen and so expenses such as care fees can accumulate.
if an individual’s capacity is lost gradually, their attorney can provide as much or as little assistance as is necessary. A deputyship order will generally pass over responsibility for all assets immediately – though the attorney should involve the individual in decision-making if they are still able to contribute meaningfully.
You can appoint replacement attorneys, meaning the document is future-proofed in the event that your initial attorney is unable to act. Replacement deputies cannot be appointed and therefore if your deputy dies, a further deputyship application will need to be made.

If you take appropriate professional advice when preparing the documentation and choose trustworthy attorneys, Lasting Powers of Attorney can be an incredibly useful and inexpensive tool. If you would like to discuss putting Lasting Powers of Attorney in place, please get in touch.

Author Frances Davies

Director, Private Law

Frances specialises in tax and succession planning for high-net-worth multi-generational families, and for business owners seeking to protect their assets and to find ways to pass their wealth on to future generations.

Learn more about Frances Davies

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