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Managing someone else’s money

There are a number of reasons why you might need to manage someone else’s financial affairs. They might ask you to manage them for a while because they are going away, perhaps abroad or into hospital or prison. They could have a disability, which prevents them from getting out and about. In other circumstances, you can be called on to manage someone else’s financial affairs because they no longer have mental capacity to do it themselves.

This section discusses managing someone else’s financial affairs in some of the more common circumstances.

What's in this section

On a short-term basis

There are a number of different ways to manage someone else’s financial affairs on a short-term basis and how you go about it is largely guided by the sort of financial transactions they need help with.

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Collecting benefits and tax credits

Being an agent: If someone is receiving benefits or tax credits by cashing cheques and cannot do this for a while, they can fill in the back of the cheque to allow you to cash them instead. In this case you are acting as their agent. If this continues for a while, the person you are acting on behalf of should contact the office dealing with their benefits payments.

Being an appointee: You can also be made an appointee, which means you can deal with any aspect of a benefit or credit claim on behalf of someone else.

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Dealing with bank accounts

If someone wants you to manage their bank or building society account for them, they need to contact their bank or building society to find out the correct procedure. Some may ask them to write a letter, others have a standard form.

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On a longer-term basis

If you need to manage someone’s financial affairs on a longer-term basis, the usual way to go about this is through power of attorney. There are various different types of power of attorney and which one you use depends on the circumstances. The arrangements also vary according to which country in the UK you live in.

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Regional differences

England and Wales

Ordinary Power of Attorney

Ordinary Power of Attorney is a legal document enabling one person (the donor) to give another person (the attorney) the power to act on their behalf, for example in managing finances or dealing with property.

  • There is a standard form of words to use if someone wants to grant power of attorney. Your local advice agency can help, as can a solicitor.
  • Ordinary Power of Attorney usually ends at a certain time or when the donor issues what is known as a Deed of Revocation.
  • You cannot use Ordinary Power of Attorney if a person lacks mental capacity. The document becomes invalid should this happen.
  • You do not have to register Ordinary Power of Attorney.

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Lasting Power of Attorney

  • Lasting power of attorney enables you to act on behalf of someone who lacks mental capacity. Often, the paperwork for Lasting Power of Attorney is drawn up in advance, when a person still has mental capacity, but comes into force at a later date.
  • For Lasting Power of Attorney to be legal, the paperwork must be registered with the Office of Public Guardian (link opens in a new window).

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Enduring Power of Attorney

  • Enduring Power of Attorney is a legal document that enabled a person to appoint someone to manage their affairs if they became incapable of doing so in the future.
  • This has been replaced by Lasting Power of Attorney, but if the paperwork for Enduring Power of Attorney was drawn up and registered with the Office of Public Guardian before 1 October 2007, it is still valid.

See the Gov.UK section on Enduring Power of Attorney for more information (link opens in a new window)

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If someone lacks mental capacity but no paperwork is in place

If you feel that someone close to you lacks mental capacity and needs support but has not put in place a Lasting or Enduring Power of Attorney agreement, you need to ask the Court of Protection to appoint an attorney. The Court of Protection is the part of the Court system responsible for dealing with the affairs of people who cannot make decisions for themselves. 

See the Gov.UK website for information on the Court of Protection (link opens in a new window)

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Scotland

Scotland has separate legislation, the Adults with Incapacity (Scotland) Act 2000 and a separate Office of Public Guardian for Scotland.

The framework for managing someone else’s financial affairs is as follows:

Power of Attorney: this gives you authority to act on behalf of another person in relation to a number of matters including financial affairs

Access to Funds/Intromit with Funds: this procedure allows you to obtain authority to access and manage funds held, for example, in bank accounts

Intervention Order: in this case, you are appointed by the court to take action or make decisions on behalf of someone who is incapable of doing it

Guardianship Order: this is similar to an Intervention Order, but is usually used where ongoing management of financial affairs is needed. 

The Office of the Public Guardian Scotland's website (link opens in a new window) has more information.

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Northern Ireland

Ordinary Power of Attorney: You can manage the financial affairs of someone who has mental capacity through Ordinary Power of Attorney. Your local advice agency or solicitor can help you.

Enduring Power of Attorney: This can be set up and used when someone has mental capacity and continue after they have lost mental capacity. It cannot be used until registered with the Office of Care and Protection in Northern Ireland

See the Northern Ireland Courts and Tribunals Service website for more information on the Office of Care and Protection and powers of attorney (link opens in a new window).

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Further information

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Last updated: 8 September 2014

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