MONEY MATTERS: Bank closures spell disaster for the elderly

With Ray L Best

Do you have elderly relatives?  If you do, then you will realise that they are often reliant on popping into the local branch of their bank, building society or post office to cash cheques or add some monies to their savings.

Many banks are reducing the number of outlets they have in order to reduce their costs and increase their profits.

You can’t fault the banks etc for looking after their business, but the fall-out from the closures is forcing many elderly people to access the internet for the first time.

These reluctant “silver surfers” make a rich target for organised gangs of scammers; the result is that many of the older generation are losing thousands of pounds, or even all their life savings.

But there is a way in which this can be made more difficult for these crooks and the banks actively encourage it.

To assist your elderly relatives to protect their cash and investments you need to persuade them to apply for Lasting Powers of Attorney (LPA) for Finance & Property.

If they appoint you as an Attorney, then once it is registered by the Court of Protection – this will then allow you to help them to manage their finances.

You need to do so before your elderly relative loses “mental capacity”, which means that they are no longer able to administer their financial affairs in a proper manner.

Before any bank will allow you any access to information you will need to show them an official copy of this LPA. That means you can receive regular bank statements or even go online and check everything is OK.

You can even arrange with the bank to receive immediate text messages on any payments or transfers made.

So, what is a Lasting Power of Attorney? It is at first glance a simple legal document allowing trusted Attorneys to assist or take over managing the finances of an elderly relative. So simple that you can complete one over the internet.

An Attorney is the equivalent of a Trustee, as such your actions are governed by the Trustee Act 2000.

If you act negligently you can be held responsible for any financial losses.

If, for example, you are safeguarding deposits with one bank in excess of the guaranteed bank deposit protection scheme, then as a trustee you will be obliged to transfer any excess to a different bank.

If the elderly person has a large investment portfolio, then you must not “step in the shoes” of your elderly relative and allow the investments to be held as they previously were, and you must not pretend that you are an “investment manager” and invest as you would like to invest.

It is paramount that you should invest in the best interests of the elderly relative.

There is a process and structure for both providing the care for the relative that is required without you being held to account for any losses in the investment portfolio. You must take care to follow this process.

As always you have a number of options:

  • Do nothing and hope for the best.
  • Draft an LPA over the internet – advantage, it’s cheap but will it provide peace of mind?
  • Obtain guidance from a professional – we provide a considerable amount of guidance and unlimited meetings in order to provide a complete understanding and get an LPA that provides the protection you need.

There are, of course, other documents required to protect your elderly relatives, which I will cover in MONEY MATTERS next week.

 

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Wills Tax & Trusts

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