It is a common misconception that, if someone loses mental capacity, their next of kin can automatically take control of their affairs. This would be a great reality but, sadly, is not the case.
A Lasting Power of Attorney (LPA) is a legal document that lets any individual (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help them make decisions or to make decisions on their behalf.
Without a LPA in place, those close to that person would need to apply to the court to get the necessary permissions. It goes without saying that this can be a lengthy and expensive procedure, and could also result in someone being appointed who you would not necessarily have chosen to manage your affairs.
The cost to apply to the Court of Protection is £400 (payable for both the Health and Welfare LPA and the Property and Financial Affairs LPA) and then an additional £100 to nominate a first-time deputy. For standard applications, the court aims to notify you of their decision within 16 weeks of receiving it. However, in more complex cases, or where the court needs to clarify information, it can take a lot longer than this.
During this period, the person’s finances are frozen but costs (such as those for care) will still need to be covered and any direct debits they have set up cannot be cancelled. This whole experience can place added stress at an already emotional time.
After deputyship is awarded, there are ongoing costs of £320 each year for general supervision, as well as an additional “security bond” for Property and Financial Affairs deputies. The security bond is to cover the actions of the deputy and the exact amount depends on the value of the estate, but is usually in the region of £200 – £600 each year.
Deputy costs are not cheap in any event, but can massively increase when the court does not authorise the deputy, or there is no willing deputy. In this event, a professional deputy is appointed by the Court of Protection and the costs for this can be in the region of £1,500 + VAT in the first year and £1,185 + VAT each year after.
It is clear that it is much less stressful and more cost-effective to set up a Lasting Power of Attorney.
Magenta can now can support you in offering this service, along with Will writing. For more information about this service please do not hesitate to call us for a friendly chat.