New rules to improve banks and building societies’ handling of power of attorney
The Financial Conduct Authority (FCA) has prompted banks to improve their bereavement and power of attorney services.
This is due to a perceived lack of knowledge amongst staff, with some customers left being confused and, in some circumstances, unable to access accounts.
As well as causing stress at an already upsetting time, delays in accessing funds can result in unpaid bills, for example, being unable to pay for care fees.
The improvement of this service is an integral part of the FCA’s five-year strategy which aims to help consumers manage financial affairs more easily by 2030.
Anna Woodcock, trainee solicitor in the private client team at Wake Smith looks at powers of attorney.
This article covers:
- What are powers of attorney?
- I already have enduring powers of attorney in place, do I need to have an LPA instead?
- Your property & finance attorneys
- Your next move?
What are powers of attorney?
Lasting Powers of Attorney (LPAs) are legal documents allowing you to nominate people (your attorneys) to make decisions on your behalf. There are two types – Health & Welfare and Property & Finance.
Health & Welfare attorneys can make healthcare decisions for you, decide what type of medical treatment you receive, and can make end of life choices for you. This document can only be used once you have lost capacity.
Property & Finance attorneys can manage your bank accounts, complete your tax returns, and can make property transactions and certain gifts on your behalf. This document can be used as soon as it is registered, even if you have not lost capacity. This is useful if you are physically unable to manage your affairs, such as being bed-bound and unable to get to a bank. This is really important to have in place so, should something happen, your bills can continue to be paid and your attorneys can access your account for you.
Attorneys cannot make these decisions lightly. They are legally bound by the Mental Capacity Act 2005. They must support you to make your own decisions, but if that is not possible, they must be in your best interest.
I already have enduring powers of attorney (EPAs) in place, do I need to have an LPA instead?
LPAs did replace EPAs, but if your wishes remain the same, there is no need to change it.
If you want to change your attorneys, or add specific instructions, you may wish to do an LPA instead.
An important difference is EPAs cannot be registered until you have lost capacity, or when you become incapable of managing your own affairs and the process does take several weeks. This can cause an issue if there are large bills to be paid, such as care fees, and there is no access to funds.
LPAs can be registered immediately, meaning that your attorneys can manage your funds as soon as they need to.
Please note EPAs only cover financial affairs. If you would like attorneys to manage your health and welfare decisions, you will need to have a health and welfare LPA.
Your property & finance attorneys
Choose people you trust to be your attorneys. Many people chose their partner, grown up children or friend, and you can have between one and four.
Once the LPA has been registered, take a certified copy to the bank or financial institution and let them know you have made an LPA and who your attorneys are. Do this as soon as possible after the LPA is registered, in case there are any issues.
Each bank will have their own process and should be able to explain this to you. With the FCA’s new guidance, this should hopefully be a smooth and easy process.
Being unable to access the account may cause problems later down the line – should you need unexpected or urgent care, your attorneys may need access to your account to cover care fees and manage your household bills .
Your next move?
For further information on LPAs, please contact the friendly and experienced team at Wake Smith by calling 0114 266 6660 and ask to speak to the Private Client Team.
Appointments are available over the phone, via Teams, in person at our office, or, depending on your location, we will come out to you.