I opened an Abbey savings account for an elderly lady with a general power of attorney (POA) in October 2008. The POA was accepted by the bank and another account was also opened in December 2008. But, after recent interest rate reductions, it became more beneficial to move to a two-year fixed-term bond, again in her name, paying a better return. Abbey now insists that the lady – in her mid-90s – must sign an application form to open the bond, even though the bank holds a copy of her POA. Alternatively, I am told I must get a new type of POA at further expense and hassle. Is Abbey right?

Ingrid Gubbay, counsel at Hausfeld & Co, the law firm, says confusion about the various powers of attorney (POA) – ordinary, lasting and enduring – is common among the customer service staff of banks, as well as among consumers.

Abbey’s website states that a fixed-rate bond account can be opened with a POA. Its customer service staff have also confirmed over the telephone that, in your case, where the bank already has the necessary documentation, there would be no problem in opening any type of bond deposit under an “ordinary” POA that grants general authorisation for you to act on this lady’s behalf.

An ordinary POA can be granted either for general or limited authorisation and is usually created for a set period. It will normally end either at a specified time or on the request of the “donor” using a Deed of Revocation. It will automatically be revoked if the donor loses mental capacity. There is no requirement for an ordinary POA to be registered with the Office of the Public Guardian (OPG).

However, the POA rules changed on October 1 2007 and this may have caused the confusion at the bank. The Mental Capacity Act 2005 and its code of practice, which became effective from October 1 2007, brought in a specific POA that covers property and financial affairs called a Lasting Power of Attorney (LPA). An LPA can be granted either where the donor lacks capacity or has authorised its use. Either way, it
must be registered with the OPG.

However, in this case, if the POA had been granted prior October 1 2007, it would still have been valid in 2008 even if it was not registered with the OPG, unless the donor decided to cancel it or replace it with a LPA. Legally, the bank can still agree to continue with an ordinary POA in circumstances where it has already accepted the documentation and subject to the terms of that POA. However, the bank is probably covering itself against the scenario in which the elderly lady loses capacity, and the bank finds it may be exposed to liability or there is no one authorised to make decisions.

LPAs also replaced Enduring Powers of Attorney from October 2007, although EPAs taken out before that can still be used to cover an individual’s finances. The OPG advice line on 0845 3302900 can give further information on POAs.

● Contrary to Wealth Questions (September 5/6), changing the beneficial ownership of a property that is not already registered with the Land Registry from, for example, a joint tenants to a tenants-in-common basis, is not a trigger for compulsory first registration. The property – and its ownership – can generally remain unregistered, according to the Land Registry. However, where a trust is involved, changing beneficial ownership of an unregistered property may require registration. More details are in the Land Registry’s Practice Guide 24 (Section 2.5).