When an individual loses the mental capacity to manage their own affairs, important decisions regarding their finances, property, and welfare usually need to be made by others on their behalf. In the UK, two main legal mechanisms allow other parties to manage a person’s affairs: Power of Attorney and Deputyship.
If your loved one has suffered a serious injury, such as a traumatic brain injury from a road traffic accident or workplace incident, they may no longer be able to manage their own financial or personal affairs. In such cases, their family or a legal representative may need to step in to make decisions for them.
If you’ve been asked to become responsible for a loved one’s affairs, or if you require a loved one or legal professional to take care of yours, it’s important to understand the difference between Power of Attorney and Deputyship in order to make the right decision. Here, we’ll explain Power of Attorney vs Deputyship to give you a clear understanding of both.
What is a Power of Attorney?
Power of Attorney is a legal arrangement that allows an individual (the donor) to appoint another person (the attorney) to make decisions on their behalf. This is a proactive arrangement that must be set up while the donor still has mental capacity.
There are three main types of Power of Attorney in the UK:
- Enduring Power of Attorney (EPA): An older version of Power of Attorney that’s no longer in use. If you established an EPA before 1st October 2007, it’s still valid, but they’re not used today and have been superseded by Lasting Power of Attorney.
- Ordinary Power of Attorney (OPA): Only for financial decisions, and only valid while you still have mental capacity.
- Lasting Power of Attorney (LPA): For when you want to make someone your attorney for a time when you lose mental capacity.
If you want to opt for an LPA, or a loved one has suggested you become their attorney, there are two types of Lasting Power of Attorney to choose from:
- Property and Financial Affairs LPAs: This allows the attorney to manage the donor’s finances, such as handling bank accounts, paying bills, or even selling property. It can be set up to take effect immediately or only when the donor loses capacity.
- Health and Welfare LPAs: This grants the attorney authority to make decisions about medical care, living arrangements, and other personal welfare matters. It only becomes active when the donor loses mental capacity.
Setting up a Power of Attorney involves completing the necessary legal forms and registering with the Office of the Public Guardian (OPG). Because an LPA is established in advance of a loss of mental capacity, it provides greater control over who will make decisions for an individual in the future.
What is Deputyship?
Deputyship is a legal arrangement that allows a person (the deputy) to make decisions for someone who has already lost mental capacity and did not set up a Lasting Power of Attorney beforehand (or an older Enduring Power of Attorney). The Court of Protection oversees the appointment of deputies, ensuring they act in the best interests of the individual lacking capacity.
There are two types of Deputyship in the UK:
- Property and Financial Affairs Deputyship: Allows the deputy to handle financial matters, such as paying bills, managing assets, and dealing with pensions.
- Personal Welfare Deputyship: Gives the deputy authority over healthcare and personal welfare decisions, though these are granted less frequently than financial deputyships.
Unlike Power of Attorney, Deputyship is a reactive measure that can only be arranged after the individual has lost capacity. It requires a court application and ongoing supervision by the OPG.
This process is often necessary in cases where an individual has suffered a catastrophic accident (such as a workplace injury or a fall from height) that has left them unable to make decisions for themselves. If no Power of Attorney was set up in advance, Deputyship allows family members to apply for the right to make those decisions.
What does loss of mental capacity mean?
A loss of mental capacity means that someone can no longer reliably make decisions for themselves. In legal terms, a person is considered to lack mental capacity if they are unable to:
- Understand information relevant to a decision.
- Retain that information long enough to make a decision.
- Weigh up the information to reach a conclusion.
- Communicate their decision in any way (e.g., verbally, through gestures, or writing).
It can be a temporary event or it can become a long-term disability. Conditions that can cause a loss of mental capacity include:
- Brain injury
- Stroke
- Degenerative cognitive disorders, such as dementia
- Severe learning disorders
- Mental health conditions
What are the key differences between Power of Attorney and Deputyship?
The main differences between Power of Attorney and Deputyship are:
- Timing: A Power of Attorney is arranged in advance of someone losing mental capacity, whereas Deputyship is sought after capacity is lost.
- Appointment process: A Power of Attorney is chosen by the individual and registered with the Office of the Public Guardian. A deputy is appointed by and overseen by the Court of Protection.
- Cost: Power of Attorney setup fees are relatively low, while deputyship involves court application fees, ongoing supervision fees, and potential legal costs.
- Reporting obligations: Deputies must submit annual reports to the OPG, detailing financial transactions and decisions. Attorneys don’t have this obligation.
When might you need a Deputyship?
Deputyship is required when an individual loses mental capacity unexpectedly, has not set up a Lasting Power of Attorney or an Ordinary Power of Attorney, and requires someone else to help them manage their affairs.
Common scenarios where Deputyship might be required include:
- A sudden accident leading to brain injury
- A stroke or severe illness that affects cognitive functions
- Progression of dementia without prior legal arrangements
If you’re seeking to apply for Deputyship via the Court of Protection, you’ll need to:
- Determine your eligibility to be a deputy.
- Inform the person you’re applying to represent.
- Complete the Deputyship application forms.
- Submit your application forms and supporting documents to the Court of Protection
- Pay the application fee (exemptions or reductions may be available based on your circumstances).
- Await for the Court of Protection to review your application and make a decision.
- If approved, you’ll receive the deputy order.
Power of Attorney vs Deputyship: How to decide which option is right for you
Choosing between Power of Attorney and Deputyship depends on several factors:
- Timing: If the individual still has mental capacity, setting up a Lasting Power of Attorney is the best option as it can be done relatively easily and before mental capacity is lost.
- Cost and complexity: Power of Attorney is more straightforward and cost-effective to set up, while Deputyship takes longer and is more expensive.
- Control: A Power of Attorney allows an individual to choose their attorney, whereas Deputyship leaves the decision to the individuals around them and to the Court of Protection.
Planning ahead with a Lasting Power of Attorney is typically the far better option. It helps avoid the difficulties and costs of applying for Deputyship and ensures that the personal wishes of the individual concerned are most likely to be respected.
Commonly asked questions about Power of Attorney and Deputyship
Can I switch from Deputyship to Power of Attorney later?
No, once a person has lost capacity, they cannot create a Power of Attorney.
What happens if no one applies for Deputyship?
If none of a person’s family or loved ones apply for Deputyship, decisions will typically be made by social services or the Court of Protection. This can lead to delays in managing finances and securing care.
How long does it take to set up a Power of Attorney?
It typically takes from 8 to 12 weeks for registration with the Office of the Public Guardian.
Expert legal advice from Injury Lawyers 4U
Understanding the differences between Power of Attorney and Deputyship is essential when dealing with serious injuries and long-term incapacity.
If your loved one has lost mental capacity due to a catastrophic accident, our expert solicitors can guide you through both the Power of Attorney and Deputyship processes to help secure their financial arrangements and ongoing medical care.
If you need legal advice, call us on 0333 400 4445 or fill in a contact form and we’ll get back to you as soon as possible.