Joint deposit accounts + mental incapacity

dewdrop

In the case of joint deposit accounts with a mandate "either to sign" what happens when one party suffers mental incapacity and no Enduring Power of Attorney is in place. I suspect that if the bank was formally advised they would freeze the account until steps were taken to make the party a ward of court. This would have drastic consequences for the other party who could not access the savings for a long period not to mention the cost involved. In practice i suppose banks are not advised so withdrawals can continue as heretofore. Any comments on this subject would be appreciated. I assume any action by the parent branch would be relayed to online banking system which would block transactions if the parent so decided.

Peregrinus

dewdrop wrote: »

In the case of joint deposit accounts with a mandate "either to sign" what happens when one party suffers mental incapacity and no Enduring Power of Attorney is in place. I suspect that if the bank was formally advised they would freeze the account until steps were taken to make the party a ward of court.

Pretty much. The mandate you give to the bank is automatically revoked on your mental incapacity, so if either accountholder becomes incapacitated the mandate which says "either to sign" is automatically revoked.

dewdrop wrote: »

In practice i suppose banks are not advised so withdrawals can continue as heretofore.

No doubt a discreet silence is sometimes observed. However it seems to me that this is arguably fraud, and certainly results in the person who has been withdrawing money by concealing from the bank the fact that the mandate has been revoked becoming liable to the bank to repay the money.

In practice I suspect banks have to be a bit flexible here. In the case of, e.g., a husband-and-wife account, they will probably allow access to the money to pay for care and treatment for the disabled party, while protection proceedings are being taken.

Claire McCarthy Cork

I agree. It all depends on a whole set of intersecting factors ("the circumstances"). The circumstances you describe would probably give rise to the presumption of a "resulting trust", which means that it is assumed that money is held on trust for the incapacitated party. The can be rebutted if some proof can be provided that the incapacitated party intended the other party to be able to use the money in the event of his or her incapacity or death. In that case, practically speaking, you would have to have something in writing to that effect in order to rebut the presumption. Most commonly, you might have executed a document intended to rebut the presumption of a resulting trust ever arising, when the account was opened - the bank would have paperwork.

If not, and if the money is required to look after the incapacitated person, you would have to look at the Wards of Court procedure...

There are a lot of variants to consider... for example, you don't say to what extent the person's capacity is affected, or to what use it is intended to put the money. A consultation with a Solicitor is advisable.