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.
Compare with the Independent: See how much you could save by switching credit cards. Compare now
Threat of 'catastrophic cascade of collisions' must be averted, warn scientists
- 1 Australian man Rod Sommerville reacts to bite from deadly snake by reaching for cold beer
- 2 Pakistan vs Paul Smith: Sandal-wearers bemused by famed British designer's attempts to sell traditional Peshawari chappal-style shoes for the distinctly untraditional sum of £300
- 3 North Korea elections: Kim Jong-un wins 100% of the vote
- 4 Steve Irwin’s final words: Cameraman present at death opens up about deadly stingray attack for the first time
- 5 Sharknado 2: Former WWE wrestler Kurt Angle to fight second wave of flying sharks
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
iJobs Money & Business
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£55000 - £70000 per annum + benefits: Pro-Recruitment Group: In-House Corporat...
£80000 - £100000 per annum + benefits: Pro-Recruitment Group: In-House Opportu...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...
Day In a Page
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay
A three-bedroom farmhouse with a large inglenook fireplace and exposed beams
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town