Lasting powers of attorney (LPA) have been widely adopted since their introduction in 2007, letting individuals appoint family members, friends and professional advisers to make decisions on financial and health and welfare arrangements should they lose the ability to make those decisions directly.
Governed by the Mental Capacity Act 2005, an LPA must be registered with the Office of the Public Guardian (OPG). Once registered and particularly in relation to the LPA for property and financial affairs, an attorney may immediately have the legal authority to act on the donor’s behalf in managing their finances, including operating bank accounts, paying bills and making investment decisions.
Despite their popularity and widespread use, how banks and financial institutions choose to register and recognise LPAs varies widely. Attorneys frequently report difficulties when dealing with banks, leading to delays, frustration and, in some cases, financial harm to the donor
One of the most common complaints is inconsistency in how different banks, and even different branches of the same bank, handle LPAs. Some require certified copies of the LPA whilst others insist on seeing the original. Some banks ask attorneys to visit in person, while others provide online registration.
Attorneys can also be asked to provide numerous forms of ID, proof of address, or even undergo background checks, even when the attorney is a close family member. While financial institutions are required under anti-money laundering (AML) regulations to carry out due diligence, these processes can feel disproportionate when an attorney is acting under a registered LPA.
Many attorneys find it difficult or even impossible to obtain online access to the donor’s accounts, due to banks’ internal policies or technical limitations. This can significantly hinder an attorney’s ability to manage day-to-day finances effectively, particularly if they do not live near the donor.
These issues are often further compounded by a lack of awareness among bank staff about what an LPA is and what it allows attorneys to do, leading to unnecessary delays.
So widespread is the issue, it has now been recognised by the Financial Conduct Authority (FCA), which in April this year launched a review into how banks manage LPAs. MATT – A LINK TO THE FCA PROBE IS HERE.
Four ways to manage your LPA and bank relationships
Bishop & Sewell has extensive experience in managing and advising clients on their LPAs and has seen firsthand the difficulties in dealing with banks. Here are our four top tips that can make it a little easier.
- Prepare and register your LPA early
It is always advisable to prepare an LPA before it is needed and register it with the OPG. It is also advisable to have an experienced solicitor prepare that LPA for you. They will be able to foresee and plan for potential challenges you may face when dealing with the banks. - Keep certified copies of the LPA
We recommend attorneys keep several certified copies of the LPA to hand. Copies must be certified by the donor provided they are still able to make their own decisions, a solicitor or notary. Check, however, whether your donor’s bank will accept certified copies. - Communicate clearly with your bank
When approaching a bank, provide a written summary of your authority as an attorney, supported by a certified copy of the LPA. Be prepared to show proof of identity and address. Ask to speak with a member of staff trained in powers of attorney if difficulties arise. - Escalate where necessary
If you encounter problems, ask whether the bank has a dedicated LPA team. Many established banks now do. Consider escalating the matter through the bank’s complaints process.
