Lendin money to mum

[Myself]

Hello.
Mum is in her 90s, has 24hour care, in her own home. I’m POA.
I now need to ‘lend’ her money to sustain the situation.
Two related questions ....
Is there any way to formalise the ‘lending’ so i have a legal right to recover the money on my mum’s death ... or at the time she has to move into institutional care?
And, while i don’t have an issue of the authorities recovering the costs of that instututional care frim the sale of mum’s house ... would i have first call income from the house sale, in order to recover my loan?
I guess we might be talking about £60-£100,000 loan, depending for how long my mum’s dementia remains fairly stable.
Thank you ...

 

[Shedrech]

hello @Myself
and welcome to TP
I am guessing that the LA won't agree to fund the level of care your mum needs to stay living in her own home - have you checked with them and asked about ways of funding?
It would be wise to contact the OPG to ask them about what you're considering, as you are Attorney for your mum and your idea isn't a usual way of funding care.
Is there any way you could buy your mum's house, at a fair market rate, to release her money in it?
I do think you need proper financial and legal advice.

 

[Myself]

Thank you.
OPG ?

 

[2jays]

Thank you.
OPG ?

OPG - office of the public guardian

https://www.gov.uk/government/organisations/office-of-the-public-guardian

Whenever I had to contact them in the past they were always very helpful

 

[Boromir]

Best thing to do is ask the solicitor, the one who helped you organise the POA. Sounds like the kind of situation which does not match up so well with the generic rules and regs. You could also ask a proper financial adviser. Assuming you have a full POA in place (Welfare included), that should afford you the power to manage the assets in her best interests, including the sale of property, but it might be complicated if the idea is to effectively sell to oneself as a means of transferring funds, whereas I'd be surprised if there were any formal way of privately loaning someone a substantial sum, unless it could be done under some old legacy laws, or perhaps something is possible because it's family. It may also vary depending on where one lives in the UK. Also might be worth asking the bank.

 

[mrjelly]

I don't have direct experience but perhaps you could consider an equity release plan where you draw down cash as you need it. The less you draw down and the shorter the time before the house is sold the the less the interest charges would add up. Could be another option if your first plan doesn't pan out.

 

[nitram]

A charge equivalent to the loan could be put on the property meaning you would be repaid the funds when the house was sold.
To do this you would need OPG consent and a knowledgeable solicitor.

 

[lemonjuice]

One query, supposing your mother's condition does deteriorate to the stage where she does have to move into (expensive) residential care? That could be around £50,000 a year mark. Depends on how much the house could be worth, but what would happen, even if you could get a legal agreement drawn up, should there not be enough money to 'pay you out after your mother has died?
I would imagine you couldn't recover any repayment of a loan until that point as it might still be classed as deprivation of assets, ensuring she is not able to cover her own care costs.

Seriously I wouldn't use my own money. It shows a willingness to pay for your mother's care needs and therefore you could even be pursued to pay for her care when eventually 'her' money is gone and that 'repayment' might well then go twice to her care.

Others will possibly say I'm exaggerating and scenarios I fear would never pan out- I'm very much a 'Plan for the worst type person'.

 

[surfergirl409]

Hello.
Mum is in her 90s, has 24hour care, in her own home. I’m POA.
I now need to ‘lend’ her money to sustain the situation.
Two related questions ....
Is there any way to formalise the ‘lending’ so i have a legal right to recover the money on my mum’s death ... or at the time she has to move into institutional care?
And, while i don’t have an issue of the authorities recovering the costs of that instututional care frim the sale of mum’s house ... would i have first call income from the house sale, in order to recover my loan?
I guess we might be talking about £60-£100,000 loan, depending for how long my mum’s dementia remains fairly stable.
Thank you ...

 

[surfergirl409]

Hello.
Mum is in her 90s, has 24hour care, in her own home. I’m POA.
I now need to ‘lend’ her money to sustain the situation.
Two related questions ....
Is there any way to formalise the ‘lending’ so i have a legal right to recover the money on my mum’s death ... or at the time she has to move into institutional care?
And, while i don’t have an issue of the authorities recovering the costs of that instututional care frim the sale of mum’s house ... would i have first call income from the house sale, in order to recover my loan?
I guess we might be talking about £60-£100,000 loan, depending for how long my mum’s dementia remains fairly stable.
Thank you ...

 

[surfergirl409]

When my mum was having care at home I paid the costs but as I was poa for her health and finances I was able to pay back those costs to myself when her home was sold to finance her residential care. Mum also had an equity release mortgage, by the time the loan with interest was paid back there was enough money for almost a year of fees for full time residential care in a private care home. I would not ever recommend a lifetime equity release mortgage to anyone!

 

[lemonjuice]

I would not ever recommend a lifetime equity release mortgage to anyone!

Couldn't agree more. The debt just keeps racking up, unlike a mortgage which does decrease equity release the 'debt just keeps on growing'.