10 UK banks have relaxed rules around Lasting Power of Attorney registrations, with six now allowing you to register online, Which? Money research has found.
(LPA) applications have risen considerably in the past decade - in the first quarter of 2020 they were up 5% between January and March 2020 compared with the previous year, according to the latest Family Court Statistics.
Since then, the coronavirus pandemic has caused even more of us to consider what would happen to our finances if we were no longer in a position to manage them.
Here, Which? explains how LPA works, how to navigate banks' varying processes, and assess the level of service attorneys can expect when registering and using their powers.
In England and Wales, LPA is a legal document that allows you ('the donor') to give at least one other person ('the attorney') authority to look after your affairs.
There's an LPA to cover finance and property, and another for health and welfare.
Scotland and Northern Ireland have their own equivalent documents. In Scotland, there's Continuing Power of Attorney and Welfare Power of Attorney; in Northern Ireland there's only Enduring Power of Attorney, which covers finance and property.
The LPA must be registered with the Office of the Public Guardian (OPG), then attorneys must register their powers with each financial provider the donor holds an account with.
This legal arrangement remains in place even if your mental faculties decline, but must be set up before that happens. If you lose mental capacity - the ability to make and understand important decisions - you will no longer be allowed to set up an LPA.
In May 2020, we surveyed 17 major UK banks about their approach to registering and managing LPAs - 10 told us they had implemented new online or phone registration services, or relaxed the rules around registration in response to the coronavirus crisis.
The six banks that now offer online LPA registration are Clydesdale Bank, HSBC, Monzo, Santander, Tesco Bank and Yorkshire Bank.
For Monzo, an online-only challenger bank, online registration is the only option.
Tesco Bank told us its online registration is only temporary and it will usually ask for LPAs to be registered by post.
HSBC told us it's using a new service from the OPG. The OPG issues a code to the customer, who passes it on to the bank. The bank is then able to see a summary of the LPA without the customer having to post, scan or take LPA documents into a branch.
While Barclays doesn't offer online registrations, it said it will 'support customers wishing to register an LPA without the need to come into branch'.
Registration over the phone is also now possible with Bank of Scotland, First Direct, Halifax, HSBC, Lloyds and Santander.
The Co-operative Bank, which previously only accepted LPA registration by post, said it's now allowing customer to register in branch, too.
TSB has made no changes to its LPA registration process and going into the branch is the only option.
Despite many banks making efforts to improve the LPA registration process, attorneys still often encounter difficulties when they come to use their powers, including restricted access to banking facilities. This is despite advice from the OPG telling banks to treat attorneys as they would the customer they're acting on behalf of.
For instance, HSBC and M&S Bank allow only one person to have online banking access to an account that's in the donor's name alone (ie not a joint account) - meaning only the donor or the attorney can use it, not both.
Tesco Bank and Virgin Money don't allow attorneys access to online banking at all, while First Direct and Nationwide only grant online access to attorneys if the donor has lost capacity.
Borrowing activity may also be restricted. Barclays won't let attorneys make any applications for credit products or amend existing ones, and HSBC and M&S Bank impose similar limitations, although attorneys can ask for an overdraft limit to be reduced.
You can speak to your bank about setting up a 'third-party mandate' instead of an LPA. This is an agreement that allows someone else to issue instructions on your behalf.
It doesn't come with an eight-week wait like setting up an LPA does, but has a few other drawbacks. First, third-party mandates only applies to the bank in question; if you use more than one bank, you'll have to set up several of them.
The third party mandate must be set up while you have mental capacity, and the bank has the right to refuse your request.
For instance, RBS, NatWest and Ulster NI can supply codes over the phone, which a trusted neighbour or friend can use to withdraw an agreed amount of cash from an ATM.
Elsewhere, Bank of Scotland, Halifax and Lloyds allow trusted third parties to withdraw up to £100 a day as long as they visit a branch with some form of ID.
Which? Wills can help you set up a Power or Attorney or Lasting Power of Attorney, ensuring you avoid any mistakes that might scupper the process.