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       Capital Care




Suppose the other joint holder of the accounts dies before the incapacitated person?   

The bank would immediately freeze the account.

The capital held in the account would automatically pass in full to the other joint holder even if this person was not the intended beneficiary.


Secondly, monies held in a joint account do not pass under a Will but automatically pass in full to the other joint owner, so if the now deceased had any of their own money in the account this would pass immediately to the incapacitated person. The same would happen if the incapacitated person died. Their monies in the account would pass to the other person with whom they held the account, even if this person was not an intended beneficiary.


If the trusted person stayed alive, they’d be no problems though?

Not true.

Firstly a bank may insist that a separate account is set up for the incapacitated person.

Secondly, the bank freezes the account until it has received assurance that the interests of the incapacitated party are being upheld. They do this as they have a duty to protect the assets of the mentally incapacitated person. The British Bank Association booklet entitled “You and your joint account” states at page 6:

‘If the other joint-account holder becomes mentally incapable, the bank or building society must get an order from the Court of Protection (in England and Wales), which protects the rights of mentally incapacitated people, before they can let you use the account.’


The freezing of a joint account has a serious knock-on effect as the joint owner cannot even withdraw what is their own money without an order from the Court of Protection. This could be devastating, especially if the joint owner is having their only form of income paid into this joint account. They will now not have access to their own pension payments for many weeks.


A Registered Lasting Power of Attorney is sufficient for a bank to allow the joint account holder access to their account.


MYTH BUSTER - We don’t need Lasting Powers of Attorney because all our accounts are in joint names

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