Legal planning for dementia: LPAs, Court of Protection, and care fees

When a family member receives a dementia diagnosis, legal planning is often the last thing on anyone’s mind. The focus, understandably, is on the person and what the diagnosis means for daily life. But the decisions made in the weeks and months that follow, particularly around legal authority, have a direct effect on the quality of dementia care that can be arranged later.

Key Insights

• A lasting power of attorney can only be set up while the person living with dementia still has mental capacity. Acting early protects their right to choose who makes decisions on their behalf.
• If no LPA is in place when capacity is lost, families must apply to the Court of Protection for a deputyship order, a process that typically takes five to six months and costs significantly more.
• Legal planning and care planning are closely linked. Having an LPA in place means families can act quickly to arrange the right care without delays caused by uncertainty over who has authority.
• Care fees are a practical reality, not a distant concern. Understanding who can legally manage finances, and how, is one of the most important steps a family can take after a diagnosis.

What is a lasting power of attorney?

A lasting power of attorney (LPA) is a legal document that allows someone, known as the donor, to appoint one or more people they trust to make decisions on their behalf if they lose mental capacity. The person appointed is called the attorney.

An LPA can only be created while the donor has mental capacity. Once registered with the Office of the Public Guardian (OPG), it can be used with the donor’s permission, even if they are still able to manage day-to-day decisions themselves. Having an LPA registered does not remove a person’s right to decide for themselves. It simply ensures someone they trust can step in when needed.

What are the two types of LPA?

Most families will need both types. The key differences are:

• Property and financial affairs LPA – gives the attorney authority to manage bank accounts, pay bills, arrange care fees, and deal with property
• Health and welfare LPA – covers decisions about daily routines, medical treatment, and where the person receives care, including whether they remain at home with live-in care support or move into a residential setting

Each LPA must be registered with the OPG before it can be used. The current registration fee is £92 per LPA document, making the total cost £184 per person for both types. Fee reductions are available for those with a gross annual income under £12,000, and some people on qualifying benefits may be fully exempt. Check current eligibility at gov.uk.

What about enduring powers of attorney?

Enduring powers of attorney (EPAs) were replaced by LPAs in October 2007. Any EPA made and signed before that date remains legally valid and does not need to be replaced with a new LPA. If a family member already has an EPA in place, it can still be used once registered with the OPG. A solicitor can confirm whether an existing document meets the requirements. For anyone without a legal authority document in place, the LPA is the correct route today.

Why does timing matter so much?

A diagnosis of dementia should never be seen as a barrier to putting an LPA in place. In the vast majority of cases, a person living with dementia can still make a valid LPA, because a diagnosis does not automatically mean a person lacks mental capacity.

Mental capacity is decision-specific and time-specific. A person may be able to make decisions about some things but not others, and their capacity may change over time. The key issue is whether the person can understand the nature and implications of the document at the time it is signed. If dementia has progressed to the point where capacity has been lost, an LPA can no longer be created.

The practical message is clear: the earlier a family seeks legal advice after a diagnosis, the more options remain open.

Hometouch’s clinical team can help families understand the care side of a dementia diagnosis. The legal side requires an independent solicitor with experience in later-life planning.

What happens if there is no LPA?

If someone loses capacity without an LPA in place, no one automatically has the right to manage their finances, property, or healthcare decisions, including a spouse or adult child. This catches many families by surprise. The assumption that a close family relationship confers legal authority is one of the most common and costly misunderstandings in later-life planning.

Without an LPA, the family must apply to the Court of Protection for a deputyship order. The process involves:

• Submitting several forms to the court, along with an application fee of £400
• Arranging a medical assessment, which typically costs between £100 and £200
• Waiting for the court to process the application, which normally takes five to six months

During that time, a family may be unable to access bank accounts, pay care costs, or formally confirm care arrangements. In urgent situations, it is possible to make an emergency application to the Court of Protection to authorise specific payments while the main application is being processed.

What is a deputy, and what can they do?

A deputy is appointed by the court to make decisions on behalf of someone who has lost capacity. There are two types of deputyship orders, which broadly mirror the two types of LPA:

• Property and financial affairs deputyship – the most common type, covering access to bank accounts, payment of bills, managing assets, and arranging funding for care
• Health and welfare deputyship – less commonly granted, and usually only where there is a dispute about care or no close family available to act

Deputies are supervised by the Court of Protection and must submit annual reports explaining the decisions they have made. Ongoing supervision fees of £320 per year apply in most cases. This is a significant additional burden compared to the relative straightforwardness of acting under a registered LPA.

Making or updating a will after a dementia diagnosis

A will is a separate but equally important part of legal planning for dementia. It sets out how a person’s money, property, and possessions should be distributed after they die. Without a valid will in place, the rules of intestacy apply, and the state determines who inherits.

A person living with dementia can still make or update a will, provided they have the mental capacity to understand its effect at the time it is signed. This is known as testamentary capacity, and it is distinct from the capacity required to make an LPA. If there is any question about capacity, a solicitor will typically arrange for a medical professional to confirm the person is of sound mind at the point of signing. This step also helps protect the will from any future challenge.

Key points to be aware of:

• A will must be signed and formally witnessed to be valid
• It should be stored somewhere others can locate it, either at home or with a solicitor
• A solicitor specialising in later-life planning should be consulted unless the will is straightforward
• Making or updating a will is most straightforward while capacity is not in question, so acting promptly after a diagnosis is advisable

The NHS legal affairs guidance and the Alzheimer’s Society both carry detailed information on wills and dementia for families who need further guidance.

How does legal planning connect to care fees?

For families arranging dementia care at home, having the right legal authority in place is not just a procedural matter. It is what makes it possible to act.

Without either an LPA or a deputyship order, a family cannot legally access the finances needed to pay for care. This has practical consequences:

• Banks will not allow a family member to access another person’s accounts without legal authority, even in an emergency
• Care providers require clarity on who is authorised to make decisions and enter into care arrangements
• Local authorities conducting a care needs assessment will need to know who holds legal authority before funding discussions can progress

Dementia does not automatically entitle someone to free care. Local authority funding is means-tested, and anyone whose assets exceed £23,250 is generally expected to contribute to or meet the full cost of their care. Independent legal and financial advice is essential before any decisions are made about using property or savings to fund care.

For a broader picture of what financial support may be available, the NHS Continuing Healthcare framework is worth understanding. Hometouch’s article on NHS Continuing Healthcare explains how eligibility is assessed and what the process involves.

What is deprivation of assets, and why does it matter?

Deprivation of assets is one of the most misunderstood areas of care fees planning, and one of the most consequential. It refers to a situation where a person has reduced their assets, whether by gifting money, transferring property, or other means, in a way that a local authority concludes was intended to reduce their liability for care costs.

If a local authority determines this has occurred, it can assess the person as though they still own the assets in question. The financial and legal consequences can be serious. Some points families should understand:

• There is no time limit on how far back a local authority can look when investigating deprivation of assets. The rules are not equivalent to the seven-year inheritance tax rule, which applies in a different context entirely
• Transferring ownership of a property to a family member does not automatically protect it from a care funding assessment if the transfer is found to have been motivated by avoiding care costs
• Consistent, modest gifts made over many years for genuine personal reasons are treated differently from large transfers made shortly after a diagnosis or at a point when care needs were foreseeable
• In certain circumstances, the local authority can pursue the person who received the assets for the recovery of costs

Legitimate financial planning, carried out transparently and with professional advice, is not the same as deprivation of assets. A solicitor accredited by the Association of Lifetime Lawyers, or a financial adviser accredited by the Society of Later Life Advisers (SOLLA), can advise on what is permissible and what carries risk. Acting before care is needed gives significantly more options than acting under pressure.

How does live-in care fit into legal planning?

Once legal authority is in place, families are in a position to act on the person’s wishes rather than defaulting to whatever can be arranged most quickly. For many people living with dementia, the clear preference is to remain at home.

Live-in care provides one-to-one support from a vetted, self-employed carer who lives in the person’s home. Research consistently shows that familiar surroundings support cognitive stability in people living with dementia. A health and welfare LPA makes it possible for an attorney to formally confirm that home-based care is the right arrangement, without risk of challenge.

Hometouch is a doctor-founded, CQC-regulated platform. Every carer is individually vetted, and families choose from recommended profiles rather than having a carer assigned to them. A custom care plan is put in place from the outset and reviewed regularly by the clinical team.

Legal planning for dementia: Frequently asked questions

What is the difference between an LPA and a Court of Protection deputyship?

The person themselves arranges an LPA while they still have mental capacity, giving a chosen attorney the authority to act on their behalf in future. The Court of Protection grants a deputyship after capacity has been lost, and the court appoints a deputy rather than the person choosing one. Deputyship takes longer to obtain, costs more, and involves ongoing court supervision. Setting up an LPA while capacity exists is almost always the simpler and less expensive route.

Can someone with a dementia diagnosis still make an LPA?

Yes, in most cases. A diagnosis of dementia does not automatically mean a person lacks mental capacity. Capacity is assessed decision by decision, and many people in the early stages of dementia retain the ability to understand and sign legal documents. If there is any doubt, a formal capacity assessment from a GP or specialist should be sought before proceeding.

How long does a Court of Protection deputyship application take?

The process typically takes five to six months from the date of application. An application fee of £400 is payable, along with a medical assessment fee of between £100 and £200. Once appointed, deputies are supervised by the court and pay annual supervision fees of £320 in most cases. In urgent situations, an emergency application can be made to authorise specific decisions while the main application is pending.

Who pays for dementia care if the person can no longer manage their finances?

If an LPA for property and financial affairs is in place, the attorney can access the person’s accounts and arrange payment of care fees directly. Without an LPA, a deputyship order from the Court of Protection is required before any family member can legally access another person’s money. In the interim, the local authority has a duty to step in if there is no one with legal authority to make arrangements and the person lacks the capacity to do so themselves.

What is deprivation of assets?

Deprivation of assets occurs when a person deliberately reduces their assets, for example, by transferring property or making large gifts, in a way that a local authority concludes was intended to reduce their care funding liability. If the local authority reaches this conclusion, it can assess care fees as though the person still owns those assets. There is no time limit on how far back a local authority can look, so early, transparent financial planning with professional advice is essential. Independent legal or financial advice from a SOLLA-accredited adviser should be sought before any significant transfers are made.

What is an advance decision, and is it the same as an LPA?

An advance decision is a separate document that sets out specific medical treatments a person does not want to receive if they lose capacity. It is legally binding if it meets the required conditions. An LPA is different: it appoints a named person to make a broader range of decisions on someone’s behalf. The two documents can be used alongside each other, and both form part of a comprehensive legal plan after a dementia diagnosis.

Legal planning for dementia is most effective when it happens early, before capacity becomes a question rather than after. An LPA gives the person living with dementia control over who makes decisions on their behalf and makes it possible for families to act quickly when care is needed. A valid will, an understanding of the means test, and awareness of the deprivation of assets rules are equally important parts of the picture. Without this foundation, families can find themselves facing delays, costs, and decisions that could have been avoided.

For families thinking about what care might look like at home, having the right legal framework in place is what everything else rests on. Hometouch works with families at every stage of this process, from initial enquiry through to a settled care arrangement, with clinical oversight throughout.

If your family is thinking about live-in dementia care and you’d like to understand your options, our team is here to help.