By Nikki Barnes, Wills and Probate Solicitor of Rowlinsons Solicitors and a member of The Society of Trusts and Estates Practitioners 
(STEP)
Many married couples are blissfully unaware that if one of them loses mental capacity, the other account holder does not have an automatic right to access the account. In fact, most banks and other financial institutions will not only freeze sole accounts but will also freeze joint holdings as soon as they become aware of one holder becoming incapable of making decisions.
The Banks Have a Right to Freeze Your Assets
The British Bankers’ Association (BBA) states that your bank account will be frozen if you lose capacity and one of the following is not in place:
- Lasting power of attorney (LPA)
- Enduring power of attorney (EPA)
- An order from the Court of Protection
The banks do not carry out such an action merely to be awkward but they are under a duty to safeguard the funds of someone who has lost mental capacity. A Property and Financial Affairs LPA allows you to nominate someone you trust to make financial decisions on your behalf.
EPAs also allow someone to make financial decisions on your behalf. LPAs replaced EPAs under The Mental Capacity Act 2005, but EPAs are still valid if they were drawn up before 1st October 2007.
A Joint Account Won’t Protect Your Loved Ones
Putting assets into joint names, for example with a spouse or a child, will not be adequate to guarantee continued access to the bank account. Without a registered Property and Financial Affairs Lasting Power of Attorney in place, your assets will be frozen and this could lead to problems such as paying bills and the mortgage.
Having a Financial Lasting Power of Attorney in place will prevent this situation arising and, if you do lose mental capacity, it will also prevent the need for your family having to go down the alternative route of applying for a deputyship order from the Court of Protection; which is a longer, drawn out process and is much more expensive and considerably more onerous on your appointed deputies.
At Rowlinsons we are keen to help you to ensure that all future eventualities are covered. Contact Hannah Butterworth to book a FREE 30 minute consultation on 01928 735 333.