If a loved one can’t manage their money because they’ve lost their ability to make decisions, you might need to step in and help. In this guide, we cover actions you can take in their best interests and the types of financial decisions you can make on their behalf.
Helping someone who has lost mental capacity manage their money
Checking if someone has lost mental capacity
If someone close to you is facing challenges, find practical ways to assess and understand their mental capacity.
Follow these steps to work out what you need to do
What is mental capacity?
Mental capacity means being able to decide or act on your own. If someone can’t do this, they’re considered to ‘lack capacity’.
Everyone deserves the right to make decisions about their own life. But sometimes, due to injury, illness or disability, a person’s ability to understand and make good decisions might be temporarily or permanently affected.
Mental capacity might be affected by:
- dementia
- a severe learning disability
- a brain injury
- a mental health illness
- a stroke, or
- unconsciousness caused by an anaesthetic or sudden accident.
If your loved one appears to have lost mental capacity, the first thing to do is to check if this is the case.
Checking if someone has lost mental capacity in England and Wales
You can ask the person’s doctor or a medical professional to assess their mental capacity. They will follow guidelines set out in the Mental Capacity Act 2005. This applies once someone turns 16.
When deciding whether someone is unable to make a decision, they will consider these questions:
- Can the person understand the information that is relevant to the decision?
- Can the person retain the information long enough to make the decision?
- Can the person weigh up the information as part of the process of making a decision?
- Can the person communicate their decision – whether by talking, sign language or any other means?
If they can do these things, they will usually be found to have mental capacity. If they do, they can legally manage their own money.
Find out more on GOV.UK about checking mental capacityOpens in a new window
Checking if someone has lost mental capacity in Scotland
Mental health capacity in Scotland is covered under the Adults with Incapacity (Scotland) Act 2000. This applies once someone turns 16.
You can contact the Mental Welfare Commission to find out more. For help with mental health and incapacity law, and care and treatment:
- call their Advice Line on 0800 389 6809Opens in a new window (calls are free)
- email mwc.enquiries@nhs.scotOpens in a new window, or
- visit the Mental Welfare Commission for Scotland websiteOpens in a new window
Checking if someone has lost mental capacity in Northern Ireland
Northern Ireland created the Mental Capacity Act (Northern Ireland) 2016 to cover both mental health and capacity issues within one piece of legislation. This applies once someone turns 16.
Currently in Northern Ireland, common law requires that decisions must be made in a patient’s best interests if the patient lacks capacity.
Find out more about mental health capacity in Northern IrelandOpens in a new window
Check if the person you want to help has a power of attorney
A power of attorney is a legal document that allows one or more person they trust to formally manage their money and make decisions on their behalf. Find out how to check for one and what to do.
Follow these steps to work out what you need to do
Check for an existing power of attorney
A power of attorney can only be set up while the person you want to help can make their own decisions.
Depending on where the person lives, they might already have:
- a lasting power of attorney in England and Wales (or an enduring power of attorney if it was set up before 1 October 2007)
- a continuing power of attorney in Scotland, or
- an enduring power of attorney in Northern Ireland.
If they can’t tell you, ask their family, solicitor or check with the official body for where they live:
- in England or Wales: the Office of the Public GuardianOpens in a new window
- in Scotland: the Office of the Public Guardian ScotlandOpens in a new window
- in Northern Ireland: the Office of Care and ProtectionOpens in a new window
If there is a power of attorney already in place, register it (if needed) if you’re named as the attorney or contact the attorney if you’re not.
You can find more about power of attorney in your country in our guide How to make and register a power of attorney
What to do if the person doesn’t have a power of attorney
If the person you want to help doesn’t have a power of attorney in place, you need to start the process for applying to the Court of Protection if you live in England or Wales; the Office of the Public Guardian if you live in Scotland; the Office of Care and Protection if you live in Northern Ireland.
Follow these steps to work out what you need to do
Apply to become their deputy, guardian or controller
You’ll have to make a formal application to the right agency, depending on where you and the person you want to help live.
You’ll have to pay an application fee, and it can take a few months to get the paperwork properly sorted out.
To avoid confusion, it's important to know that you won’t be called an ‘attorney’ if you make this kind of application. Although you’ll usually have the same power and responsibility as an attorney to manage the affairs of the person who has lost mental capacity.
- in England and Wales, you’ll be called a deputy
- in Scotland, you’ll be called a guardian
- in Northern Ireland, you’ll be called a controller.
See the Age UK website for more information about what happens if you don’t have a power of attorneyOpens in a new window
Who can be a deputy, guardian or controller?
Usually, court orders are granted to a friend or relative of the person who’s lost mental capacity. But it could also be a professional like a solicitor or an accountant. Professionals will usually charge a fee to the person whose affairs they are managing.
The courts can also allow more than one person to become someone’s deputy, guardian or controller.
How to apply for a court order
You can find instructions and paperwork for your application on these websites:
- in England or Wales, apply for a deputyship orderOpens in a new window
- in Scotland, apply for a guardianship orderOpens in a new window
- in Northern Ireland, apply to become a controllerOpens in a new window
The way you apply and the documents you need are different in each country. You must be 18 or over to apply. You will usually need to:
- tell the person that you’re applying for a court order for to make decisions on their behalf
- tell people that know the person who’s lost mental capacity
- pay court costs and registration fees
- get assessments of the person’s mental capacity from a doctor or another medical professional.
Should I use a solicitor for my application?
If you feel confident completing the form, you might choose to complete all the forms yourself. If not, consider getting professional advice from a solicitor.
What are the duties of a deputy, guardian or controller?
The courts will decide what powers the deputy, guardian or controller will have.
These might include:
- managing everyday money, including bills, bank accounts and dealing with insurance
- buying and selling property and arranging for maintenance for it.
You can find informal ways to help a loved one manage their money in our guide Help someone to manage their everyday money
Show the document to the relevant financial providers
When you’ve completed the application process, you’ll get an official document confirming that you’ve got the power to act.
It’s a good idea to show the document to every organisation you want to deal with as soon as you get it.
They’ll keep the details on file, which will save you time later on.
Manage the money according to the rules
When you manage money for another person, you must always:
- make decisions in the person’s best interests
- only make the decisions that the court says you can
- take care in making your decisions.
It’s important to keep clear accounts and note down the reasons you’ve made decisions. You’ll need to complete a report each year explaining the decisions you’ve made.
- in England and Wales, at GOV.UK complete your deputy reportOpens in a new window
- in Scotland, at the Office of the Public Guardian Scotland complete an account formOpens in a new window
- in Northern Ireland, at Office of Care and Protection find out more about submitting an accountOpens in a new window
If you’re a parent or guardian of a young person who doesn’t have mental capacity
Find out more about claiming benefits or managing a Child Trust Fund or Junior ISA for a young person who doesn’t have mental capacity once they turn 18.
Follow these steps to work out what you need to do
Apply to become their deputy, guardian or controller
Once your child turns 18, they legally become an adult. This means you will no longer have parental responsibility to make decisions for them.
To make a decision on behalf of someone who has turned 18, you must seek their consent or make a power of attorney.
If they lack the mental capacity to provide consent, you must apply to the courts to become their deputy, guardian or controller.
GOV.UK has a toolkit for parents and carers to make financial decisions for a young person who lacks mental capacityOpens in a new window
Become an appointee for their benefits
If you’re the parent or guardian of a young person and want to manage their benefits, you can apply to become an appointee on their behalf to the Department for Work and Pensions (DWP).
Any decision you make as an appointee when using the benefit should be in the best interests of the person who lacks capacity.
Find out how to make someone you trust become the appointee in:
- England and Wales, at GOV.UK becoming an appointeeOpens in a new window
- Scotland, at mygov.scot acting on behalf of someone applyingOpens in a new window
- Northern Ireland, at nidirect becoming an appointee for social securityOpens in a new window
Help with Child Trust Funds or Junior ISAs
If your child was born between 1 September 2002 and 2 January 2011, a Child Trust Fund would have been opened for them and the government will have added money to it.
Once your child reaches 18, if they have mental capacity they can access the money themselves. As a parent or guardian you can’t automatically access any bank account for your child, including their Child Trust Fund or Junior ISA, even if they’re disabled or don’t have mental capacity.
If your child has fluctuating mental capacity, once they are 18 they can set up a lasting power of attorney for property and financial affairs which would let you manage their accounts.
But if they don’t have mental capacity you would need to apply to the courts as described in the section above in this guide. If you do this before your child turns 18 you won’t need to pay the normal fees. Remember that this process can take several months.