Arranging to formally manage a friend or family member’s money for them is a big step for both of you.

For them it means giving up financial control and entrusting someone else with their money.

For you it means taking on responsibility for someone else’s financial future. So it isn’t something to be entered into lightly.

The law says you must assume someone is able to make their own decisions unless there’s evidence to the contrary.

If the person you’re caring for ‘lacks mental capacity’, and they haven’t already appointed you or someone else to act as their attorney, you can apply to the Office of the Public Guardian to be someone’s ‘deputy’ to formally handle their financial affairs.

This would allow you to deal with, for example, the bank and care providers on their behalf.

If someone’s income only comprises of state pension and/or welfare benefits and no power of attorney exists, then rather than apply to the Court of Protection to become a deputy and application can be made to the department of Work and Pensions to become an appointee enabling you to receive an disburse their income on their behalf. This route can also be used for local authority benefits like housing or council tax benefit.

Bearing all this in mind, it’s a good idea to think about mental capacity now and work out what you might need to do in the future

If you need to deal with someone creditors on their behalf you will need a letter from them giving you authorisation to do so, most creditors will take signed instruction which then allows you to deal with that particular account, remember you will have to send one to each of the creditors and this may take some time to do. You can download our template letter below