Bank Accounts and Mental Capacity

When discussing Lasting Powers of Attorneys (LPAs) with my clients, I am often asked if they are necessary. Surely if you have a joint bank account with your partner, a financial LPA is not needed? The assumption is that if you lose mental capacity then your nominated relative has full access to your income and pension so that you can carry on paying your bills. However, this is not always the case.

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The guidance from the British Bankers’ Association states that if one joint account holder loses mental capacity then that Bank can decide to restrict the use of that account to essential transactions only e.g living expenses and residential care or medical bills. They could even freeze the account until a Court of Protection application has been registered which is an expensive and time consuming application process.

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Therefore, my advice is always do a Lasting Power of Attorney as it is an insurance policy. Why gamble with your mental capacity and your individual Bank’s policy when you can appoint attorneys and leave out the guesswork.