Assisting Someone with Their Money and Affairs
There comes a time when managing your money and affairs becomes increasingly difficult. It can become a real struggle as you age and start to lose physical and mental capacity to get transactions done in the way you want them done. This isn’t helped by the closure of local banks and the move to online banking which, despite the efforts of Age UK, local libraries and other organisations in trying to teach computer literacy to older people, using one is a totally alien environment to an older person.
So, before you reach the point of needing assistance, it is important that you make sure that a person or persons you trust are legally able to help you carry out any transactions, or they carry them out as you would have done.
Fortunately, there are a number of ways that you can achieve this and they are: Third-party mandate, Lasting Power of Attorney (or its predecessor Enduring Power of Attorney), Court of Protection, DWP appointee and becoming a Local Authority ‘suitable person’.
This variety has led to some confusion among banks and building societies. However, new guidance developed by the Office of the Public Guardian (OPG), a government body that supervises the financial affairs of people who lack mental capacity, aims to make the process smoother.
Now let us go into further detail on each of these different ways to assist someone with their finances as it depends on the type and depth of assistance is needed as to which option you will need to take.
Third Party Mandate
If a mentally capable person is physically unable to deal with their finances, a simple method is for the account holder and the person needing access to the account to set up what is known as a ‘third-party mandate at the bank. Once this is in place the person is then authorised to carry out instructions and assist the account holder.
It is not possible to do this if the account holder has lost or is losing their mental capacity. The arrangement should also be cancelled if the account holder becomes mentally incapacitated.
If you are finding it difficult to manage your pensions why not ask The Department for Work and Pensions (DWP) to appoint an ‘appointee’ to act on your behalf? This is often done when a person is receiving benefits, such as a pension, but cannot deal with their affairs themselves. To be made an appointee you have to contact the DWP which will then visit and interview you and fill in an appointee form (form BF57). The DWP also visits the person for whom you will be acting.
The role of the appointee
An appointee is responsible for making and maintaining any benefit claims on behalf of someone who is incapable of managing their own money.
An appointee can be held responsible if a benefit is overpaid. The appointee must:
- tell the Benefits office about any changes which affect how much the claimant gets;
- spend the benefit it receives in the claimant’s best interests.
An appointee can only deal with a person’s benefits.
Local authority ‘suitable person’
In some cases, local authorities make direct payments to people who arrange their own health and social care. In these cases, a suitable person can access those payments and manage them for a person who cannot do it themselves.
The local authority will decide if a person is suitable and will be the only person who is able to access and manage the money paid by the local authority. The payments are then paid into a bank account in the suitable person’s name but clearly stating ‘on behalf of (the person needing assistance)’.
Lasting Power of Attorney and Enduring Power of Attorney
On The National Careline helpline, we get very many calls from children who are witnessing their parents being financially coerced and abused by another person. It is perhaps, an old friend from way back or similar, but who is now happily ensconced in father or mother’s home and happily assisting them to manage their money. Depending upon the control the person has, they may block the calls so that family cannot visit, or listen to phone conversations so that the children can never have a private conversation with their parent. At this point, even if the children say something about the situation, the parent is often too much under the influence of the ‘friend’ and doesn’t want to upset them, not realising that they are the victim of financial abuse.
To prevent this happening, it is important to make a Lasting Power of Attorney. A Lasting Power of Attorney is in two parts, one dealing with Finances and the other with Health and Welfare. It is better to complete both parts as this will give the people chosen to become attorneys the authority to assist with everything from finances to healthcare. This arrangement will last from when a person just needs some help right through to when a person does not have the mental capacity to look after their own financial affairs or to make reliable decisions.
A Lasting Power of Attorney (LPA) can only be made before a person is unable to make decisions. The form is filled out and registered with the Office of the Public Guardian (OPG). Registering the LPA does not mean a person has lost mental capacity and the person should still be involved in any decisions about them.
Enduring Power of Attorney (EPA) was replaced by LPA in 2007 although the former is still valid if signed before 1 October 2007. If the account holder has mental capacity the EPA can be used to manage a relative’s accounts but if the person has lost or is losing mental capacity the EPA must be registered with the OPG if it was not previously registered with the Court of Protection.
The National Careline can help you with making a Lasting Power of Attorney. Please contact us or telephone us on 0800 0699 784 for more information.
Court of Protection
If a person has not made a Power of Attorney or is not capable of making one because they have lost mental capacity, the Court of Protection will decide who handles that person’s affairs.
You have to apply to the court for a ‘deputy appointment’. The order will set out what decisions the deputy can make for the account holder, for example, decisions around investments or a mortgage.
What information will the bank need?
In all cases, taking control of another person’s finances isn’t to be taken lightly. Before the bank or building society will let you access an account that is not in your name they will need:
- Proof of name and address: your passport or driving licence is acceptable for your name, and proof of address can be a recent utility bill, council tax bill or letter from a government department like HM Revenue & Customs.
- Evidence of your authority to act for the account holder. This means an original or a certified copy of a Lasting Power of Attorney, either stamped on every page by the OPG, or signed on every page by the donor and a solicitor or notary, or another signed legal document that you have giving you authority.
- Proof of the account holder’s name and address: the same proof as before is acceptable.
- If an EPA has been signed and the person still has mental capacity the bank will need to see an unregistered form but if mental capacity has been lost the bank will need to see a registered EPA stamped on every page by the OPG or signed on every page by the account holder and a solicitor or notary.
- If you have been made a ‘deputy appointment’ by the Court of Protection the bank or building society will need to see a copy of the court order.
- If you are a DWP appointee the bank will need to see the BF57 form the DWP issues to you.
Some banks and building societies may ask for specific items of proof of name and address so it is worth checking beforehand.