The Fiduciary at the Counter: Defending an LPA Account After a Bank Closure
Photo: Steve Daniels , CC BY-SA 2.0, via Wikimedia Commons
When a bank writes to an attorney to say that an account held under a lasting power of attorney will close, the letter can look like an administrative matter. It is not. The account belongs to the donor — the person who made the LPA — and the attorney is managing someone else's money under a legal duty. A closure can interrupt care fees, utility payments, benefit receipts and the ordinary running of a household. The attorney may have no account of their own with the bank, yet they are the person who must pick up the consequences.
The bank is ending a relationship, not the attorney's authority
An LPA for property and financial affairs, once registered with the Office of the Public Guardian, gives the attorney authority to manage the donor's financial affairs. A deputyship order from the Court of Protection does similar work where there is no valid LPA. The bank's decision to close an account does not cancel that authority. It ends the bank's willingness to provide an account on its terms. The attorney must therefore move the donor's banking elsewhere, while preserving records and continuity. The donor's money remains the donor's money.
Why closure letters land on attorney-managed accounts
Banks apply identity checks, anti-money-laundering controls and risk appetites to all accounts. Attorney-operated accounts receive additional scrutiny because the bank must understand who is giving instructions and why. A bank may ask for a certified copy of the registered LPA, identification for the attorney and donor, proof of address, and information about source of funds or planned transactions. It may also ask questions about the attorney's conduct. Some closures follow missing documents; others follow a commercial decision, a branch closure, a change in product terms or a risk assessment. The letter may not give the full reason. Banks are not always required to explain a risk decision in detail, but they must treat the customer fairly.
Duties that continue during a closure
Under the Mental Capacity Act 2005, an attorney must act in the donor's best interests, avoid conflicts of interest and keep the donor's money separate from their own. A deputy has similar duties and may be required to account to the Court of Protection. Closure makes those duties more urgent, not less. The attorney should secure statements and transaction records, list income and essential outgoings, and identify payments that cannot wait: care home fees, rent or mortgage, council tax, utilities, insurance and any regular health costs. Benefits paid into the account may need to be redirected. If the donor receives means-tested care, the local authority may need prompt notification. Where the donor has capacity, they should be involved as far as possible.
What the bank can reasonably request
Banks can ask for evidence that the attorney is authorised and that the account is being used properly. A registered LPA or deputyship order, certified copy, attorney identification and information about transactions are normal requests. What banks should not do is insist on a court order where a valid registered LPA already exists, or treat the attorney as the customer simply because they operate the account. A request for full annual accounts may be proportionate in some deputyship cases; in an ordinary LPA it may be excessive unless there is a specific concern. If the bank has a safeguarding concern about the attorney, it may refer the matter to the Office of the Public Guardian or the local authority. That is different from closing the account without explanation.
Challenging a closure that leaves the donor exposed
An attorney can complain in writing. The complaint should ask for the closure date, the contractual basis for closure, copies of the account terms and a final statement. It should explain the practical effect on the donor: unpaid care fees, missed direct debits, benefit payments at risk. Ask the bank to allow enough time for an alternative account and to route payments safely in the meantime. Banks have vulnerable-customer teams; use them where the donor is elderly, disabled or at risk. If the bank does not resolve the complaint, the Financial Ombudsman Service can consider whether the closure was fair. The ombudsman will look at the terms, the notice given and the impact on the customer. For urgent safeguarding concerns, contact the local authority. For concerns about an attorney's conduct, contact the Office of the Public Guardian.
A practical sequence for the first week
Request statements and a transaction list immediately. Open a new account in the donor's name, with the attorney's authority noted, or ask another bank what it needs for an LPA or deputy account. Redirect income and benefits, then move direct debits and standing orders. Tell care providers and the local authority about the change. Keep a written log of every call and letter. Do not use the donor's money for the attorney's own expenses. If the bank has frozen the account rather than closed it, ask for essential payments to be released and explain the consequences. A closure is serious, but it is not the end of the attorney's authority. The task is to keep the donor's financial life running while the complaint and the move are dealt with.
