Elderly relatives may need help for various reasons.  They may be in the early stages of dementia, or have physical or mobility difficulties.   Maybe they’d just prefer you to deal with matters for them. But how do you do this easily and legally?

Just handing over their bank card, puts them at risk of fraud. If they want to allow a one-off cash withdrawal, they can send instructions to the bank in writing to allow an over-the-counter withdrawal, although the person collecting the money will need official identification and a letter of consent. If the account holder loses mental capacity, the account will be frozen and a letter of consent will no longer be valid.  If help with finances is likely to be an ongoing requirement, it’s better to consider something more permanent like a Lasting Power of Attorney (LPA).  

Do they still have mental capacity?

The best way to help an elderly relative with their financial and property matters is for them to prepare a Lasting Power of Attorney whilst they are fully able, and then register it with the Office of the Public Guardian. This way, they can choose someone they know and trust to legally manage their affairs.  It will then be ready and available if the person does lose their mental capacity, or if they simply want to give consent to their Attorneys to act for them now.

  • They can give permission to delegate financial tasks ie., taking out money, transferring money, investments, paying bills, buying or selling property.

What if they give you their Debit card & PIN?

Bank customers are protected from losses from fraud as long as they haven’t been party to the fraud themselves, or grossly negligent. Sharing your PIN or security details (ie., bank account passwords for online banking, etc) will be in breach of your account terms and conditions. If someone gives you their PIN number, this will compromise the security of their account.  It doesn’t matter that you may be a husband, wife, son or daughter, we should never give out PIN number to anyone else. 

What if you set up an online account for them and make payments and transfers on their behalf?  Banks can freeze an account without notice when they detect a suspicious activity, and the account holder may lose their protection against fraud if they have been negligent.

Why do I need a LPA? Can’t I get around it by…….?

Why try to ‘get around’ it with temporary, restricted, possibly fraudulent solutions which won’t work in the long term, when you could just set up a LPA now which gives legal authority to the person(s) who are trusted to manage financial and property matters for their elderly relative?  If they don’t set up the LPA while they are still of sound mind, then it is likely to be too late.

If there is no LPA – what’s the alternative?

Bank accounts are frozen, and it may be that no-one has access to funds or can deal with matters to help someone who has lost capacity.  That’s going to cause lots of problems and frustration.  It may be necessary to apply to the Court of Protection as a Deputy.  This will be an expensive and slow process (anywhere between 6-12 months).  The Deputy will need approval by the Court, and the powers given may be restricted.  There will also be ongoing annual costs.  This option should really only be considered as a last resort.