Capacity and Joint Assets

Plan ahead and protect your family.

Couples and other family members often think that owning assets jointly means that one person will be able to look after the affairs of the other should that other lose mental capacity. In particular joint bank accounts between family members have been perceived as a way to “get around” having to make a Lasting Power of Attorney. However, this is increasingly not the case.

The Law Society has set up an agreed protocol with the British Bankers Association and Nationwide, following concerns that counter staff at banks were confused by Powers of Attorney (which allow someone else to sign for the account holder). The training which has been agreed should be welcomed as it should make life easier for the many people who rely on such Powers, particularly in the care of elderly relatives. However, with this framework comes a lesser known trap for those who do not have an LPA or EPA in place when they lose capacity.

Banks can, and often do, choose to have a policy that if one holder of an “either to sign” joint account loses capacity, then the account is frozen until an LPA, EPA (the predecessor of an LPA) or Deputyship Court Order is produced. Likewise, if two people own a house together and one loses mental capacity the other cannot sell the jointly owned house unless there is an LPA, EPA or Court Order. Without an EPA or LPA in place, a Court Order is the only option and, as you may imagine, the cost and delay in obtaining this is significantly higher than if the person in question had made an LPA or EPA while he or she was able.  A lot of stress and expense can therefore be saved by planning ahead and protecting yourself and your family by having the correct documents in place.  

Please feel free to contact us on 01392 258451 or This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it. to arrange an appointment or discuss matters further.