Managing someone else’s financial affairs
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.
In this section, we take a look at how to manage someone else’s
financial affairs in some of the more common circumstances. As this
is a complicated subject, it is a good idea to seek advice,
initially from an agency, such as Citizens Advice or Advice UK (You
can use the Turn2us Find an Adviser
tool to find a local adviser) and then more specialist
help from a solicitor later on. If you do not already have a
solicitor, you can find one using the
Law Society's database (link opens in a new window).
Step one: 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.
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.
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.
Step 2: 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.
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 so the document becomes invalid should this
happen.
- You do not have to register Ordinary Power of Attorney.
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).
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.
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 information about
the Mental Capacity Act on the Government' information website
Directgov (link opens in a new window).
Scotland
There is a separate Office of Public Guardian for Scotland and
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 (link opens in a new window)
website has more information.
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 (PDF, 144KB) (link opens in a new
window) website.
Last updated: 18 May 2011
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