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

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
relatives.

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.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Digital Optimisation Executive - Marketing

    £30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

    Recruitment Genius: Financial Reporting Manager

    £70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

    Recruitment Genius: Payments Operations Assistant

    £23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

    Recruitment Genius: Telephone Debt Negotiator

    £13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

    Day In a Page

    Sepp Blatter resignation: The beginning of Fifa's long road to reform?

    Does Blatter's departure mean Fifa will automatically clean up its act?

    Don't bet on it, says Tom Peck
    Charles Kennedy: The baby of the House who grew into a Lib Dem giant

    The baby of the House who grew into a Lib Dem giant

    Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
    Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

    The harrowing testament of a five-year-old victim of Syria's endless civil war

    Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
    The future of songwriting: How streaming is changing everything we know about making music

    The future of songwriting

    How streaming is changing everything we know about making music
    William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

    Recognition at long last

    Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
    Beating obesity: The new pacemaker which helps over-eaters

    Beating obesity

    The new pacemaker which helps over-eaters
    9 best women's festival waterproofs

    Ready for rain: 9 best women's festival waterproofs

    These are the macs to keep your denim dry and your hair frizz-free(ish)
    Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

    Wiggins worried

    Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
    Liverpool close in on Milner signing

    Liverpool close in on Milner signing

    Reds baulk at Christian Benteke £32.5m release clause
    On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

    On your feet!

    Spending half the day standing 'reduces risk of heart attacks and cancer'
    With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

    The big NHS question

    Why are there so few new GPs when so many want to study medicine?
    Big knickers are back: Thongs ain't what they used to be

    Thongs ain't what they used to be

    Big knickers are back
    Thurston Moore interview

    Thurston Moore interview

    On living in London, Sonic Youth and musical memoirs
    In full bloom

    In full bloom

    Floral print womenswear
    From leading man to Elephant Man, Bradley Cooper is terrific

    From leading man to Elephant Man

    Bradley Cooper is terrific