A mental health act

Melanie Bien on gaining power of attorney over a relative's affairs

Only when a close friend or relative is mentally incapable of making their own decisions does it become clear how difficult it is to get power of attorney over their affairs.

This gives a named person the right to sign legal documents and act on somebody else's behalf. It is easy enough for someone to grant power of attorney to another person while they still have the mental faculties to do so. But if they become mentally incapable before getting round to it, a lengthy application through court, which could cost hundreds of pounds, is necessary.

One Independent on Sunday reader found herself in this situation when her mother became mentally ill. Clare Stevens wanted to make sure her mother, Sarah, had enough money in her bank account to pay her mortgage and utility bills until she got better. But because power of attorney had not been granted before her mother's unexpected illness, there was little she could do.

"I couldn't get anywhere with the bank," Ms Stevens said. "Initially they told me a letter from my mother authorising me to act on her behalf would be enough, but then they changed their minds. It is not as if I wanted to take money out; I was actually trying to deposit money to pay the mortgage. So somebody else at the bank suggested I should pretend to be my mother and bank over the phone."

Her mother's mortgage lender even suggested she change the loan to a joint one, but Ms Stevens decided against this. "It would mean I could find out how much she owed, but it would also make me liable for any debts she ran up. She had started to spend money on things she didn't need, which was out of character. All I wanted to do was make sure the mortgage got paid."

There are two kinds of power of attorney: ordinary and enduring. An ordinary power may be limited to specific matters – for example, if you are moving abroad and you appoint somebody to sell your house – or a general one relating to all your financial affairs. The power can be used to operate bank accounts or sign documents or deeds. It does not last forever and can be revoked at any time.

Ordinary power of attorney ends automatically if a person becomes mentally incapable of managing their own affairs. In such a situation you need an enduring power of attorney (EPA), which has to have been set up when that person was mentally capable and is much more complicated. It does not come into effect until the donor becomes incapable of managing their own affairs and up to that point may be revoked.

Once mental incapacity occurs – a doctor will usually be called on to verify this – and if an EPA exists, it must be lodged with the Court of Protection office at the High Court. This is a fairly straightforward process, costs about £75 and requires written notice to at least three close relatives. Unless they object, the court accepts the registration and the power will lie with that person until the donor dies. Those with power of attorney can act as if they are the donor, within any restrictions.

A power of attorney document can be bought off the shelf in a stationers if your affairs are straightforward. For more complicated affairs, consult a solicitor. This should cost between £50 and £100.