If a loved one can’t manage their money because they’ve lost their ability to make decisions, you might need to step in and help. In this guide, we cover actions you can take in their best interests and the types of financial decisions you can make on their behalf.
If someone close to you is facing challenges, find practical ways to assess and understand their mental capacity.
Mental capacity means being able to decide or act on your own. If someone can’t do this, they’re considered to ‘lack capacity’.
Everyone deserves the right to make decisions about their own life. But sometimes, due to injury, illness or disability, a person’s ability to understand and make good decisions might be temporarily or permanently affected.
Mental capacity might be affected by:
If your loved one appears to have lost mental capacity, the first thing to do is to check if this is the case.
You can ask the person’s doctor or a medical professional to assess their mental capacity. They will follow guidelines set out in the Mental Capacity Act 2005. This applies once someone turns 16.
When deciding whether someone is unable to make a decision, they will consider these questions:
If they can do these things, they will usually be found to have mental capacity. If they do, they can legally manage their own money.
Mental health capacity in Scotland is covered under the Adults with Incapacity (Scotland) Act 2000. This applies once someone turns 16.
You can contact the Mental Welfare Commission to find out more. For help with mental health and incapacity law, and care and treatment:
Northern Ireland created the Mental Capacity Act (Northern Ireland) 2016 to cover both mental health and capacity issues within one piece of legislation. This applies once someone turns 16.
Part 1 of the Act that covers ‘deprivation of liberty’ issues came into force on 1 October 2019, but much of the Act is not yet in force.
Currently in Northern Ireland, common law requires that decisions must be made in a patient’s best interests if the patient lacks capacity.
A power of attorney is a legal document that allows one or more person they trust to formally manage their money and make decisions on their behalf. Find out how to check for one and what to do.
A power of attorney can only be set up while the person you want to help can make their own decisions.
Depending on where the person lives, they might already have:
If they can’t tell you, ask their family, solicitor or check with the official body for where they live:
If there is a power of attorney already in place, register it (if needed) if you’re named as the attorney or contact the attorney if you’re not.
If the person you want to help doesn’t have a power of attorney in place, you need to start the process for applying to the Court of Protection if you live in England or Wales; the Office of the Public Guardian if you live in Scotland; the Office of Care and Protection if you live in Northern Ireland.
You’ll have to make a formal application to the right agency, depending on where you and the person you want to help live.
You’ll have to pay an application fee, and it can take a few months to get the paperwork properly sorted out.
To avoid confusion, it's important to know that you won’t be called an ‘attorney’ if you make this kind of application. Although you’ll usually have the same power and responsibility as an attorney to manage the affairs of the person who has lost mental capacity.
Usually, court orders are granted to a friend or relative of the person who’s lost mental capacity. But it could also be a professional like a solicitor or an accountant. Professionals will usually charge a fee to the person whose affairs they are managing.
The courts can also allow more than one person to become someone’s deputy, guardian or controller.
You can find instructions and paperwork for your application on these websites:
The way you apply and the documents you need are different in each country. You must be 18 or over to apply. You will usually need to:
If you feel confident completing the form, you might choose to complete all the forms yourself. If not, consider getting professional advice from a solicitor.
The courts will decide what powers the deputy, guardian or controller will have.
These might include:
When you’ve completed the application process, you’ll get an official document confirming that you’ve got the power to act.
It’s a good idea to show the document to every organisation you want to deal with as soon as you get it.
They’ll keep the details on file, which will save you time later on.
When you manage money for another person, you must always:
It’s important to keep clear accounts and note down the reasons you’ve made decisions. You’ll need to complete a report each year explaining the decisions you’ve made.
Find out more about claiming benefits or managing a Child Trust Fund or Junior ISA for a young person who doesn’t have mental capacity once they turn 18.
Once your child turns 18, they legally become an adult. This means you will no longer have parental responsibility to make decisions for them.
To make a decision on behalf of someone who has turned 18, you must seek their consent or make a power of attorney.
If they lack the mental capacity to provide consent, you must apply to the courts to become their deputy, guardian or controller.
If you’re the parent or guardian of a young person and want to manage their benefits, you can apply to become an appointee on their behalf to the Department for Work and Pensions (DWP).
Any decision you make as an appointee when using the benefit should be in the best interests of the person who lacks capacity.
If your child was born between 1 September 2002 and 2 January 2011, a Child Trust Fund would have been opened for them and the government will have added money to it.
Once your child reaches 18, if they have mental capacity they can access the money themselves. As a parent or guardian you can’t automatically access any bank account for your child, including their Child Trust Fund or Junior ISA, even if they’re disabled or don’t have mental capacity.
If your child has fluctuating mental capacity, once they are 18 they can set up a lasting power of attorney for property and financial affairs which would let you manage their accounts.
But if they don’t have mental capacity you would need to apply to the courts as described in the section above in this guide. If you do this before your child turns 18 you won’t need to pay the normal fees. Remember that this process can take several months.
