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Don’t bank on it: advice for joint account holders

The British Bankers’ Association (BBA) has issued guidance to its member institutions regarding mental capacity.

The British Bankers’ Association (BBA) has issued guidance to its member institutions regarding mental capacity.

The BBA guidance, called Banking for people who lack capacity to make decisions, states:

“If you are the joint account holder and the other joint account holder becomes mentally incapable, you do not automatically have the right to access the account unless you have a Lasting Power of Attorney, Enduring Power of Attorney or an order from the Court of Protection.”

The ramifications of the guidance is now being seen in banks across the country and has made it common practice for high street banks to stop any further withdrawals from a joint account if one of the account holders becomes mentally incapable. The rationale behind this approach is that both parties must have consent to sign and allow a joint account to operate. When one account holder becomes mental incapacitated, this continuing consent is broken.

Many banks now advise that withdrawals can only be reinstated (in the case where mental capacity is already lost) by the appointment of a Deputy. Deputyship applications in the Court of Protection are notoriously complex and lengthy, causing inconvenient delays and substantial fees which can frequently cost thousands of pounds.

This change of mandate could have devastating consequences for the continued use of the account by the other account holder. It is yet another compelling reason to prepare and register Lasting Power of Attorney documents in advance of any such event.

A registered Lasting Power of Attorney documents gives someone else permission to manage your finances and property in the event that you develop a mental or physical condition that makes it harder for you to manage them yourself. Having these documents in place can give great peace of mind, save distress and financial hardship to your family and will save money in the long run.

The Wills, Tax, Trusts and Probate team at Weightmans LLP has the requisite experience to guide you through the process of choosing attorneys, completing the necessary forms and registering an LPA. To arrange a no obligation meeting, please contact Paul Horton or a member of the Wills, Tax, Trusts and Probate team.