Third party mandate/joint accounts

This can be used by someone who is mentally capable but is unable to carry out a particular transaction – for example, the person may be physically unable to visit the bank, and may need someone to do this on their behalf. It is necessary to contact the bank or building society to ask about its requirements. In some cases a letter of authority or the completion and signing of a single form is sufficient and this may be used as and when required until it is cancelled. Other institutions require a fresh form authorising someone to act on the account holder’s behalf to be completed before each transaction.

In the case of joint accounts, mental incapacity of an account holder terminates the mandate and the bank or building society is entitled to decline any further transactions until it has new instructions from all account holders, including the legally authorised representative of the incapacitated one, for instance, a Receiver appointed by the Court of Protection.

Power of Attorney or Enduring Power of Attorney

A Power of Attorney is a legal document which authorises one or more people to handle another person’s financial affairs (including property, shares, money etc.), either generally or in relation to specific items.

An Enduring Power of Attorney is a legal document which authorises one or more people to handle another person’s financial affairs (including property, shares, money etc.) and will continue even if the person no longer has mental capacity, provided that it is registered with the Public Guardianship Office, previously known as the Public Trust Office.

To help you to decide which document is appropriate for your circumstances
you should consider the following:

• Do you need someone to act for you for a temporary period, for example
while you are on holiday?

Do you wish someone to act for you only while you are able to supervise
their actions? Then an ordinary Power of Attorney is the appropriate document.

• Do you wish someone to act for you now and if you should become
mentally incapable some time in the future?

• Do you wish someone to act for you only if you should become mentally
incapable?
Then you should consider an Enduring Power of Attorney.

NOTE: only the donor can make the decision to create a Power of Attorney or an Enduring Power of Attorney and cannot legally be forced to do so. Only if someone is incapable through mental disorder of managing their financial affairs can a Court of Protection Receivership Order be obtained.