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; request a free guide on NISAs from Hargreaves Lansdown

Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm today
News
people
News
Elton John and David Furnish exchange marriage vows
peopleSinger posts pictures of nuptials throughout the day
News
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
PROMOTED VIDEO
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
Arts and Entertainment
The Lord of the Rings and The Hobbit director Peter Jackson with his star on the Hollywood Walk of Fame
film
News
people
News
Billie Whitelaw was best known for her close collaboration with playwright Samuel Beckett, here performing in a Beckett Trilogy at The Riverside Studios, Hammersmith
people'Omen' star was best known for stage work with Samuel Beckett
Arts and Entertainment
Mark Wright has won The Apprentice 2014
tvThe Apprentice 2014 final
News
i100
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

    SThree: Trainee Recruitment Consultant - LONDON

    £20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    SThree: Graduate Recruitment Consultant

    £20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K - £45K: SThree: SThree Group have been we...

    Day In a Page

    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all
    The week Hollywood got scared and had to grow up a bit

    The week Hollywood got scared and had to grow up a bit

    Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

    Panto dames: before and after

    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
    Thirties murder mystery novel is surprise runaway Christmas hit

    Thirties murder mystery novel is surprise runaway Christmas hit

    Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
    Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

    Anne-Marie Huby: 'Charities deserve the best'

    Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
    The botanist who hunts for giant trees at Kew Gardens

    The man who hunts giants

    A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
    The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

    The 12 ways of Christmas

    We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
    Birdwatching men have a lot in common with their feathered friends, new study shows

    The male exhibits strange behaviour

    A new study shows that birdwatching men have a lot in common with their feathered friends...
    Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

    Famous diaries: Christmas week in history

    Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
    From noble to narky, the fall of the open letter

    From noble to narky, the fall of the open letter

    The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
    A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

    A Christmas ghost story by Alison Moore

    The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'