Court of Protection Deputyship: Managing Finances When Capacity Is Lost

Planning for incapacity is one of the most important — and most frequently neglected — aspects of personal financial planning. Most people are familiar with the lasting power of attorney (LPA) as the primary tool. Far fewer understand what happens when a person loses capacity without having made an LPA or enduring power of attorney (EPA): the Court of Protection must step in, and the process is significantly more expensive, slower, and less flexible than a pre-arranged LPA.

This guide focuses on Court of Protection property and financial affairs deputyship: how it works, how it differs from an LPA, the obligations placed on deputies, and the particular complications that arise where the incapacitated person has assets overseas.

LPA versus Deputyship: The Key Differences

A lasting power of attorney is made voluntarily while the donor has full mental capacity. It is registered with the Office of the Public Guardian (OPG) and takes effect when the donor loses capacity (or earlier, if the LPA so provides). An LPA for property and financial affairs allows the attorney to manage bank accounts, investments, property, and pensions on the donor's behalf.

Where no LPA exists and a person loses capacity, no one automatically has legal authority to manage their finances. Banks will freeze accounts; investment managers cannot take instructions; bills may go unpaid. The only route to regain lawful authority is an application to the Court of Protection for a deputyship order.

The differences are substantial:

Feature	LPA	Deputyship
Created	Before loss of capacity	After loss of capacity
Cost	£92 registration fee	£371 application fee + ongoing supervision fees
Timescale	8–12 weeks to register	6–12 months for order
Flexibility	Donor chooses attorney	Court appoints deputy
Ongoing supervision	None required	Annual reports to OPG
Recurrent cost	Minimal	Annual supervision fee

The cost and delay of deputyship versus LPA make the case for pre-emptive LPA planning compelling.

The Deputyship Application

An application for a property and financial affairs deputyship is made to the Court of Protection under the Mental Capacity Act 2005. The process involves:

1. Medical evidence: a completed form (COP3) by an approved clinician confirming the person lacks capacity in relation to property and financial affairs. The assessment must comply with the MCA 2005 test: does the person understand, retain, use, and communicate information relevant to the decision?

2. Application forms: the prospective deputy (usually a family member, solicitor, or professional deputy) completes the COP1, COP1A, and supporting forms. Details of the person's assets, income, and immediate needs are required.

3. Notification: certain people (family members, close associates) must be notified of the application and given 21 days to object.

4. Court consideration: the Court reviews the application. In straightforward cases, an order is made without a hearing. Contested or complex cases may require a hearing.

The order names the deputy, defines the scope of their authority, and sets out the conditions under which the deputy must operate.

Office of the Public Guardian Supervision

Deputies are supervised by the OPG. The supervision level depends on the complexity of the case:

• General supervision: for most deputies. An annual report (form OPG102 or DPT3) must be submitted, detailing all financial transactions, investments, and decisions taken during the year. A supervision fee is payable (currently £320 per year, subject to review).
• Minimal supervision: for smaller, simpler estates. A reduced annual review applies.
• Enhanced supervision: for complex cases or where concerns have arisen. The OPG may require more frequent reports, appoint a visitor, or take further action.

Failure to submit annual accounts or to comply with supervision requirements is taken seriously. The OPG can apply to the Court to have a deputy replaced.

Deputy Investment Duties

A property and financial affairs deputy has a legal duty to manage the incapacitated person's (the "protected person's") finances in their best interests. For investment management, the key obligations are:

Best interests: all decisions must be made in the protected person's best interests, taking into account their previous wishes and values where these are known.

Standard of care: a deputy who has relevant financial expertise is held to a higher standard than a layperson. A professional deputy (solicitor or financial adviser acting as deputy) must apply their professional skills to investment decisions.

Statutory guidance on investment: deputies managing investments are expected to follow the OPG's guidance note on investing. This recommends that deputies either appoint a discretionary investment manager or seek specialist financial advice, and that they take into account the protected person's risk tolerance, income needs, and time horizon.

Suitability: investments must be suitable for the protected person's circumstances — not the deputy's preferences. A deputy who invests conservatively when the protected person's needs would best be served by growth (or vice versa) may be in breach of their duty.

Accounting: all investment income and expenditure must be accounted for in the annual report. Deputies should maintain clear records of all instructions given to investment managers.

Conflict of Interest

A deputy must avoid conflicts of interest. The most common problems arise where:

• A deputy who is also a beneficiary under the protected person's will makes gifts or distributions that benefit themselves.
• A family member deputy employs a family business to provide services to the protected person.
• A deputy pays themselves or their family from the protected person's assets without Court authority.

A deputy's authority to make gifts is limited. A standard deputyship order generally permits only modest gifts to relatives or connected persons on customary occasions (such as birthdays, weddings, or religious festivals), and to charities the person might normally have supported, provided the value is reasonable in relation to the size of the estate and the person's future needs. There is no fixed statutory cash threshold; reasonableness is judged against the whole estate. Any gift beyond these limits — for example, funding school fees for grandchildren or making gifts for inheritance tax planning — requires a prior application to the Court of Protection.

Self-dealing — where the deputy transacts with themselves or their connected persons — is generally prohibited without Court approval.

Overseas Assets: Particular Challenges

A deputyship order made in England and Wales is an English court order. It does not automatically have effect outside England and Wales. Where the protected person has assets in Scotland, Northern Ireland, or overseas, the deputy's authority may be limited or non-existent without further steps.

Scotland: Scotland has its own incapacity legislation (the Adults with Incapacity (Scotland) Act 2000) and its own Office of the Public Guardian (Scotland). An English deputyship order is not automatically recognised. A separate application may be required in Scotland.

Jersey, Guernsey, Isle of Man: each has its own incapacity legislation and court processes. Separate applications are typically required. Some jurisdictions will recognise an English Court of Protection order with supporting evidence, but this cannot be assumed.

Other overseas jurisdictions: the position varies. Some countries are party to the Hague Convention on the International Protection of Adults (see the separate guide on LPA recognition abroad for more detail on the Convention's scope). A small number of countries will recognise the English court order; others require a fresh application in the local courts.

Where a protected person has significant overseas assets, a deputyship application should be accompanied by advice from lawyers in each relevant jurisdiction, and the deputy should plan for the possibility of separate proceedings in each country.

When to Use a Professional Deputy

Family members are common choices as deputies, but a professional deputy (usually a solicitor or financial adviser regulated for this purpose) may be preferable where:

• The estate is large or complex
• There are family disputes that make a neutral party appropriate
• No family member is willing or suitable
• The protected person has no close family
• There is a risk of financial abuse

Professional deputies charge for their time (typically on a solicitor's hourly rate or a fixed annual fee) and the OPG must approve the charging arrangements. Costs are paid from the protected person's estate.

How Global Investments Can Help

Global Investments provides financial planning services to deputies managing the finances of protected persons. We help deputies structure investments to meet the protected person's income needs and capital preservation requirements, document decision-making for annual accounts, and satisfy the OPG's expectations around professional investment management.

We also advise families on pre-emptive LPA planning to avoid the need for deputyship entirely — the most cost-effective and certain approach to managing potential future incapacity.

Where overseas assets are involved, we coordinate with local advisers to identify the appropriate steps in each jurisdiction.

This guide is for general information only and does not constitute legal advice. Mental capacity law is a specialist area and deputyship proceedings should be conducted with qualified legal support. Rules vary across jurisdictions. Seek professional advice tailored to your circumstances.