Financial Power of Attorney vs access to accounts

[Pantsenfyre]

Does anyone have any experience or insight on the pros and cons of getting a POA vs simply having access to bank accounts?

I discussed a POA with my mum a year back - at the time she didn't want a POA but was very happy to share all banking details with me. We are now joint account holders on one account, and I have account details for all her other financial accounts.

She is in her 70's - very active, mentally totally on top of things - but still I am less happy with this arrangement as time goes by. I need to talk it through with her again to understand why she thinks joint banking is the better arrangement.

So I'm preparing for that conversation and I guess my question is, what does a PoA do that access to bank accounts can't?

I’ve had power of attorney and also access via a banking app without telling the bank of the poa. If the day to day banking is simple then just having access is ok. If you need to make more complex decisions, or want to be able to handle life insurance policies or additional investments, then a poa is much better.

Thank you! I think my concern is what happens if there is significant loss of capacity or death. At that point I'm not clear if a bank where I'm not a named account holder would still allow access and for me to use the monies as mum's next of kin / manager

POA for me was completely separate from having day to day access to banking. Of course you can access the bank accounts normally UNTIL that day when your mum has a stroke, a heart attack or something that incapacitates her and then you are stuck. She cannot give her permission if she is physically unable to and thats where POA comes in.

My father gave me and my 2 brothers POA and it wasnt worth the paper it was written on until he passed away. Even in hospital when he was arguing with doctors and consultants and signed himself out of the hospital on his death bed the POA meant nothing. As they said, whilst your father is of sound mind he has the right to decide what is best for him. Once he passed, then it was worth its weight in gold as it made life so much easier as everything we did required the POA paperwork

been there when my husband's illness rapidly got worse......you can get access online and transfer funds if they don't know its you doing it. I had his full permission but I do know that my assertion of this would have meant naff all. If your mother had died, then you would need to go through the will or letters of administration process to get access to her accounts as a POA ends at the point of death. The loss of competence, even if its only temporary is a problem.

that may have been because you were his executors. Legally POA ends at the point of death.

OK, thank you. I'm really sorry to hear you had to go through this with your husband. It does confirm my suspicions though; if mum loses capacity or dies then access to the accounts is really not very helpful.

That's a very good example @Tessasanderson (top username, btw!) and actually probably quite helpful to discuss with mum, in case she is worried that I might use a PoA to try and take over against her will.

Not that I would have a chance of doing that!

Yes we were executors. Sorry i got that the wrong way around. I was trying to highlight that it didnt do anything whilst the doctors reckoned he was of sound mind.

As @godmum56 pointed out, i got it the wrong way around.

Whilst my dad was able to make clear decisions the POA was useless and your mum can rest easy as if you need to use it, she will not really be in a position to care.

If you would like an example of good use of POA, my partner has a family member who is a little slow but quite well off. He had a stroke and was really struggling in hospital to the point they would not let him home to his 3rd floor flat. My partner and siblings used the POA to purchase a bungalow, convert it to his needs and have it ready in a matter of weeks for him ready to move out. 1 week before he left hospital they walked in to him crying wanting to go home and they were able to tell him he was but it was to a new home. 10 years later he still lives there and is thriving.

Ive recently had this conversation with bank staff. Obviously POA is good to have if there are issues with capacity, however be mindful that this ends when the person passes away.
Bank staff advised that at the point of death its better to have joint accounts as once the deceased persons name is removed from the account then the money just goes to the other person named on the account .

I'm just going through the process of setting up POA with mum. Just so you know, you can set up a financial POA either to be effective immediately (so you can use it even whilst your mum still has capacity) or to only be effective when/if your mum is no longer able to make decisions. The choice, obviously, would be your mums. We're setting ours up to be effective immediately because Mum likes me to manage her accounts/bills etc anyway. So far when we've had more complicated things to organise Mum's gone through the security checks etc then given verbal permission for them to speak to me but we've already had some problems with this and it also means I can only deal with banks etc when I am physically with her. Another factor for our decision was that I'm sure how complicated/time consuming it would be to demonstrate lack of capacity or how it would work if the POA was not effective immediately but Mum was temporarily unable to deal with her finances (eg physical illness). We recently went through having to deal with Dad's finances with no POA (it was always one of those things that he planned to do closer to it being needed but his illness was unexpected) when he was very ill towards the end of his life and it was a complication and stress that we could all have done without.

I'd say your approach is back to front. My daughter has POA but no access to any accounts. That will only happen as and if I became incapacitated. Should your mum end up unable to function you won't be able to easily navigate her finances. It can be done but poa makes life easier. There's 2 of course, finance and health.

The joint account is fine - you’ve both got legitimate access to that.

The rest, you dont actually have legitimate access to and if the bank found out for any reason then they would suspend the online access to the account. When you have power of attorney, you get a different set up that gives you access in your own right.

So the big risk with not having power of attorney is that you can lose all access overnight. If the person still has capacity at that point then you can work alongside them while ‘they’ get ‘their’ access back. Although any hint to the bank that it’s not them who actually uses the info and they won’t reinstate the online access. If they don’t have capacity at that point, then you can’t get control and it all has to go through guardian type processes. Which is a royal pain in the arse.

At a practical level, even if the internet banking throws a wobbler and locks out the account for some suspected fraud - the only person who can reinstate that is the online account holder. It can become very obvious as go through that process that it’s not them who uses the online account.

At the moment your mum is in breach of the terms of the online banking by sharing her login details. That might help get the message over to her that it needs formalising.

My DPs have done POAs, but they aren't activated yet.

However my DB and I have been added as 'trusted friends' to their bank accounts. This means I have cards that are associated with the account and I can do their online banking. They are not joint accounts though, still only in parents names.

The GP has also been given permission to talk with us, and the Solicitors too for specific matters.

This. All of this. I used my late husband's logon and details with his permission because things moved really fast and It was either that or not being able to do what needed doing.

The risk is that sharing details is a breach of the account conditions. If a the account then has fraudulent activity the bank will just shrug and say what did you expect.

I have POA for both financial and property and health and welfare for my mum. Finance one my mum wanted me to have access immediately. I'm linked with POA to DWP too...that's been great as I get copied into things re her pension.
Definitely have another conversation.
Ive had to query spending my sister in law was doing regarding her food shop etc (she has POA) but no access to seeing bank statements. That went down well, not but having eyes on is so important.

I know....sometimes you have to choose the least bad option. I would never ever suggest to anyone that its a good idea.

I can really see the temptation to have a joint account so that you can help her with day-to-day spending etc. But there are potential issues to be aware of.

I think my concern is what happens if there is significant loss of capacity or death.

what is the arrangement? I’m assuming that in your head all the money in the joint account is your mums? And you don’t spend any on yourself? This isn’t the norm for joint accounts which are usually held ‘jointly and severally’. This means that both parties can decide to spend the money, with or without the other persons consent.

if she dies, all the money in the joint account becomes yours because you become the single account holder. Is there a lot of money in there? This is separate to any will she has made. All the other savings in her name only will go into her estate.

if she loses capacity / starts needing more care, it depends what happens and it can get complicated. As joint account holder you can continue to pay bills, receive funds etc and basically do what you like up until the point that you inform the bank that she has lost capacity. At which point they will want to know who has the authority to manage her affairs - and you don’t, as you don’t have POA. That’s often the point where the funds start needing to be legally identified as ‘her money’ only, especially if financial assessments need to be made. The implications are hard to predict - it depends what her care needs are, whether she’s staying at home / having carers / going into a residential setting. It depends how much money she has - above or below the threshold. If she loses capacity but stays at home, no care needed, then you can probably continue with the joint account for a while but you slip from doing it with her consent to without her formal consent…but the usual rules about capacity / consent don’t apply anyway because you are named on the account - complicated 🤷‍♀️

You’ve basically used a financial arrangement that’s intended for one thing (a couple to manage their joint / shared finances) for a different purpose ( you being able to access and manage your mums funds). The big difference btw this and a POA is that with the joint account, your status as one of the account holders means you can spend it as you like and you are not obliged to take her wishes or needs into account (which is why this arrangement is so open to abuse). POA protects her as the money remains hers and you are required to make decisions in her best interests.

At that point I'm not clear if a bank where I'm not a named account holder would still allow access and for me to use the monies as mum's next of kin / manager

in short, no they wouldn’t - not without POA.

And for health and welfare, the clincher for my parents was asking them: who did they want to have the power to make decisions about their life (where they live etc), when they cannot? Their children or a random, unknown social worker? My MIL had experienced this with her own mum who was ‘carted off’ to a nursing home against the wishes of all her children because the social worker was the one to decide. Cautionary tales sometimes work well.

After my mother died, my father had joint accounts with my brothers. The current account was joint with one brother and the savings account joint with the other. Obviously this will only work if there is complete trust on all sides.

No at the point of incapacity or death then you would only be able to use funds in the joint account.

I have both, so POA plus joint account holder with my mum. The joint account has worked really well as she’s got older, even just so I can order Christmas shopping for her online or buy groceries. Because she still has full capacity the POA hasn’t needed to be used.
If she never loses capacity I can still access the joint account in the event of her death, whereas the POA ceases at the point of death, something which a lot of people fail to understand.

Another thing with the joint account is that if the local authority ever needed to do a financial assessment before providing care then they can only take 50% of the money into consideration.

@Pantsenfyre DM went into a home and I had to sell her home. POA enabled me to do this. I had to liquidise savings accounts. I had to finalise bills etc. I had to send off (electronically) the POA. It’s not just about bank accounts - it’s all financial matters. Get the health one too! Say to Dm that it’s vital.