Both Lasting Powers of Attorney (LPA) and a Court of Protection Deputyship Order appoint a person(s) to administer the affairs of a person who lacks mental capacity.
Although there are similarities between the LPA and Deputyship appointments, there are substantial differences with regards to the administration and work that has to be undertaken.
Upon the making of a Deputyship order, the Deputy is required to take out an annual surety bond. This is a type of insurance policy designed to financially protect the person who has lost mental capacity, in the unlikely event that the Deputy mismanages their finances. No surety bond is required upon the making and registration of an LPA.
At the anniversary of each Deputyship year, the Office of Public Guardian (OPG) requires that the Deputy completes an annual Account. The forms are complicated and require a detailed income and must also record what best interest decisions and management work has been undertaken throughout that year. The OPG will scrutinise this report. It is common for the OPG to seek further information or clarification from the Deputy with regards to specific transactions or decision made. Although the LPA is registered at the OPG, no formal annual report is required.
It would appear sensible that members of the public should apply for an LPA before they lose capacity; the advantage being that the LPA is less formal and allows some level of choice as to whom will administer your affairs when you lack capacity to do so. Once an individual loses capacity, they may not be actively involved in the decision-making process to appoint the person who will manage their affairs, which can be distressing and can cause tension.