Power of attorney: guidelines aim to ease the stress of managing a loved one's affairs
The banks are finally streamlining a process that has been an added burden at exactly the wrong time. By Chiara Cavaglieri
Saturday 06 April 2013
Thousands of people every year take on the task of managing the
financial affairs of loved ones who are elderly or vulnerable, and
most face an uphill struggle at every turn. Things are looking up,
however, with the issue of new industry guidance for banks and
building societies, designed to reduce the burden for carers and
Launched this week, the British Bankers' Association (BBA) guidelines provide the first universal framework for bank staff, replacing a system known for causing stress and being unnecessarily complex.
Anthony Browne, the chief executive of the BBA, says: "The new guidance will help banks and building societies provide the right service with the least possible stress and inconvenience to the customer at what can be a very difficult and traumatic time."
Managing money is a pressing matter for anyone with health problems, whether mental or physical. They may struggle with bills and paperwork, and many are also particularly vulnerable to exploitation. But the good news is that it should now be much easier for helpers to access their accounts. The big problem so far has been inconsistency, with each bank requiring something different, and many asking for documents that aren't relevant or appropriate.
Relatives and others appointed to help someone manage their financial affairs have several options open to them, including powers of attorney, deputyship orders and other third-party management arrangements. But obtaining these is only half the battle. Staff members in banks and building societies often fail to recognise and understand these arrangements, and even solicitors – who are often appointed to conduct this type of work – have reported problems when dealing with banks.
Lucy Scott-Moncrieff, the Law Society president, says: "We recognised that there were unnecessary burdens placed on people at times of great stress. There were no uniform procedures in place, which resulted in stressful delays and difficulties, sometimes resulting in considerable hardship."
Staff at all banks and building societies can now reference the same guidelines so that carers and relatives don't feel that they have to jump through unnecessary hoops to get things sorted.
If you are acting on behalf of someone with mental capacity – in other words someone who can make decisions for themselves, but perhaps struggles with travel or a physical disability – they can authorise you to temporarily access their account. Often this is a matter of writing to the bank and filling out a form for a "third-party mandate". Once this is in place you should have the same power as they do to manage their account.
However, you may also need to consider specific requirements or arrangements. For example, allowing children to authorise withdrawals would work for a simple savings account, but this could pose problems if transactions needed to be carried out by phone or online.
If you want to operate more than one account, or you need to manage someone's accounts on a long-term basis, perhaps because the person has a physical illness or will be overseas for a long time, they can grant you power of attorney instead. Ordinary power of attorney is obtained via a solicitor or an adviser such as a Citizens Advice Bureau (CAB) and enables you to make financial decisions on behalf of the account holder, known as the donor.
For a relative without mental capacity – someone who cannot reliably make decisions for themselves – you can obtain lasting power of attorney (LPA), which replaced enduring power of attorney under the Mental Capacity Act 2005. This must be registered by the Office of the Public Guardian (OPG), at which point the bank or building society will need to see a stamped and signed copy of the registered form and proof of address for both you and the donor.
In the case of a progressive illness such as Alzheimer's, the donor may have arranged LPA in advance of losing the ability to make decisions, but if not, the Court of Protection can decide who handles their affairs, usually a close friend or family member. If you are appointed as a deputy, you will need to contact their bank or building society to set up appropriate arrangements, showing them a copy of the court order and proof of your details.
If you hold a joint account and your partner loses mental capacity you must speak to the bank or building society. They may decide to temporarily restrict the use of the account to essential transactions, such as living expenses and medical bills, until a deputy has been appointed or a power of attorney registered.
If there is a solicitor acting on behalf of your partner, the bank may allow both of you to operate the account independently, but it is usually easier to have separate accounts. This will also help when paying for care because a local authority should be means testing the person who is in receipt of the service and no one else.
Dealing with the benefits system can be another headache but you may be able to claim on your loved one's behalf as an "appointee" via their local Department of Work and Pensions (DWP) office. For housing benefit and council tax benefit claims you should contact the local authority to become an appointee.
Above all, for both carers and those in need of support, it is important to seek advice and help wherever it is offered.
"Dealing with finances when you are living with dementia can be a minefield," says Jeremy Hughes, the chief executive of Alzheimer's Society. "When a carer takes over, the pressure of getting to grips with power of attorney and trying to make decisions in the best interests of a loved one can be very stressful."
Bank managers may make life easier, for example by allowing the use of a signature card instead of a PIN, and many charitable organisations offer free advice. The Alzheimer's Society, with funding from Lloyds Banking Group, is rolling out a new national support programme for carers which includes a session on legal and money matters.
Crowd-to-let: How crowdfunding sites can give investors a slice of the property market for £500
General Election 2015: How you vote next week could affect your finances
Social tenants locked into energy tariff for 40 years
Winter heating underpayment brings summer pain
Five Questions On: GB Energy's new tariff
- 4 Women think Irish men are the sexiest, survey finds
- 5 Florida couple forced to register as sex offenders for having sex on public beach
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...
Day In a Page
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business