Joint Accounts and Loss of Capacity – Why “We’ll Be Fine” Isn’t Always True
- Kylie Cox
- 6 days ago
- 4 min read
Updated: 2 days ago
“We’ve got a joint account, so we’ll be fine.”
It’s one of the most common assumptions couples make. But if one account holder loses mental capacity, banks don’t always allow the other to carry on using it – even for essential bills.
Why Banks May Freeze a Joint Account
The British Bankers’ Association guidance states:
“If one joint account holder loses mental capacity, banks and building societies can decide whether or not to temporarily restrict the use of the account to essential transactions only (for example, living expenses and medical or residential-care bills) until a deputy has been appointed or a power of attorney registered.”
That means even if the money is partly yours, access could be blocked until the right legal authority is in place.
Banks do this to protect the vulnerable person’s share and prevent financial abuse – but the result can be devastating for the person left trying to pay the bills.
How Banks Find Out Someone Has Lost Capacity
Banks don’t actively go looking for capacity issues – they usually become aware through:
Direct Notification from Family or Friends – A spouse, partner, or relative contacts the bank to explain the situation.
From the Account Holder Themselves – In branch or over the phone, they may show signs of confusion or difficulty understanding.
Third-Party Reports – Carers, social workers, care homes, or solicitors raise concerns.
Unusual Account Activity – Sudden large withdrawals, new standing orders, or spending patterns out of character.
Linked Applications or Requests – An attorney tries to register a Lasting Power of Attorney (LPA), or the customer can’t pass security checks.
Once a bank suspects loss of capacity, they are obliged to safeguard the account holder – which may mean freezing or restricting the joint account until formal authority is in place.
Why You Want to Avoid a Deputyship Order
If you don’t have an LPA in place and lose capacity, your loved ones will need to apply to the Court of Protection for a Deputyship Order. This is far from ideal:
Slow and Stressful – It can take 6–12 months to get the order, during which time finances may be frozen.
Expensive – Application fees, annual supervision charges, and possible solicitor’s fees.
Ongoing Oversight – Deputies must submit annual reports, keep detailed accounts, and seek permission for certain decisions.
Loss of Choice – The Court might appoint someone you wouldn’t have chosen, even a professional deputy who charges ongoing fees for the rest of your life.
An LPA avoids all of this. Once it’s registered, it’s ready to use immediately if needed – no court delays, no extra bureaucracy, no stress.
So, What Exactly is a Lasting Power of Attorney?
An LPA is a legal document that lets you choose one or more trusted people (your “attorneys”) to step in and make decisions if you can’t.
There are two types:
Property and Financial Affairs LPA – manages bank accounts (joint or sole), bills, property, and investments.
Health and Welfare LPA – makes decisions about medical treatment, care, and where you live.
Benefits of Having an LPA in Place
Peace of mind – You know exactly who will be looking after your affairs.
Avoids delays – Attorneys can act as soon as needed.
Cost-effective – Far cheaper than applying for a Deputyship Order.
Flexibility – A financial LPA can be used with your consent even while you still have capacity (e.g., if you’re abroad or unwell).
Protects your loved ones – Saves them stress, expense, and the uncertainty of going through the Court of Protection.
Deputyship vs LPA — What’s the Difference?
Lasting Power of Attorney (LPA) | Deputyship Order | |
When it’s set up | While you still have mental capacity | After you’ve lost capacity |
Who chooses the decision-maker | You – you choose your attorney(s) | The Court of Protection – may appoint someone you wouldn’t choose |
How long it takes | A few weeks to register | Often 6–12 months (sometimes longer) |
Cost | Lower one-off fee to register | Higher application fee + annual supervision fees |
Control & flexibility | You decide powers, preferences & restrictions | Court decides powers & scope |
Ongoing oversight | None (attorneys must still act in your best interests) | Court supervision every year + reporting requirements |
Stress level for loved ones | Low – ready to use immediately | High – delays, paperwork & legal costs during a difficult time |
💡 Toucan Law Tip: Setting up an LPA now is quicker, cheaper, and gives you control. Waiting for a Deputyship means delays, costs, and possibly losing the say over who manages your affairs.
How Easy is it with Toucan Law?
We make the process simple, friendly, and stress-free. With nearly 30 years’ experience in Wills and Estate Planning, we:
Explain everything in plain English (no legal jargon).
Prepare and check all your documents for accuracy.
Handle the registration process with the Office of the Public Guardian.
Offer flexible appointments – online, by phone, or in the comfort of your own home.
No long forms, no confusing legal hoops – just a straightforward, supportive service from start to finish.
💡 Toucan Law Tip: Even if you’ve been together 40 years and share everything, don’t assume a joint account is enough. An LPA keeps your finances running smoothly if life takes an unexpected turn – avoiding the red tape, delays, and heartache that so many families face.
