Changes to UK banking guidelines mean it's now easier for someone else to manage your finances if you are no longer able to.
New guidelines have been introduced to make the historically long-winded process of getting Lasting Power of Attorney (LPA) faster and more straightforward.
When you lose the mental capacity to look after your finances, you will need someone else to do it for you.
One of the major causes is developing an illness, such as dementia, but it can also occur suddenly, such as if you are involved in an accident.
Since 2007 536,941 LPAs have been granted in the UK, according to the Office of the Public Guardian (OPG).
But there were 800,000 people living with dementia in 2012, according to the Alzheimer’s Society, and this number is set to rise to more than a million by 2021. This suggests a huge gap between those who have successfully appointed someone to have LPA and those who need to.
This is why a new set of guidelines for banking staff has been created and the timeframe for LPA has been changed.
Lasting Power of Attorney
LPA is a legal document which gives a trusted relative, friend or professional control over another adult’s finances if they are unable to manage it themselves.
A separate document giving the appointed person control over any health decisions can also be drawn up and our article, The importance of arranging Lasting Power of Attorney, explains exactly how it can be arranged.
But it can only be done before the adult in question loses this ability. What's more, arranging the legal documentation is a complicated and stressful process.
[SPOTLIGHT]In recognition of the over-complicated system which currently exists, several different organisations including the OPG, British Bankers' Association (BBA), the Building Societies Association (BSA), the Law Society, Alzheimer’s Society, Solicitors for the Elderly and Age UK have collaborated to create a new set of guidelines for banking staff when dealing with LPA.
Changing bank guidelines
These guidelines will provide information to banking staff so they are better informed about LPA. Advice will be given on topics such as recognising all the different types of authority which can be used to allow a third party access to a customer’s account and making sure a vulnerable person is not falling victim to fraud.
Lucy Scott-Moncrieff, president of the Law Society, says because there was no uniform procedure in place in the past, stressful delays and difficulties often occurred which sometimes resulted in considerable hardship.
A shorter timeframe for LPA
On top of the banking guidelines, the time it takes to complete the LPA documents has been reduced to four weeks, from six, by the OPG this month.
Those people who may object to an application of LPA also now have three weeks to do so, a fall from five weeks.
The aim of these changes is to speed up the whole thing but there have not been any changes to the rule which states that LPA can only be granted before an adult loses their mental capacity to deal with their finances.
> Answer a Lovemoney survey and you'll be entered into the draw for a brand new iPad!