Two questions re. mums money.

[netsy22]

I have just got LPA for finance for my mum. I already manage all her financial affairs and am 3rd party on her bank account. I have not been keeping records of what I spend on her behalf. Should I do so now?
She also wants to keep giving me and my brother gifts of money. (Couple of hundred pounds every so often, to say thank you for caring for her. )
Should I accept these? The capital from her house sale is largely invested- the money gifts come from her income. She is not in a care home, nor is likely to be in the near future. She is under the threshold limit for inheritance tax. I don't want there to be any question of me taking her money.

 

[Pickles53]

First question...yes, I would strongly recommend you keep records of all spending from your mum's account. Try to minimise how much cash you withdraw; if you use a debit card for spending from her current account, that automatically creates a record of what was paid to whom on her bank statement.

If you have LPA, you are obliged legally to manage your mum's finances in her best interests, which generally is interpreted to mean she keeps as much money as possible for her own needs. Any gifts have to be in line with gifts she would have made when she was well (eg Christmas and birthday presents) and also proportionate to her overall financial circumstances. There is some official guidance on this from the OPG but you can also phone them and ask specific questions. You cannot benefit financially from being an attorney, though you can claim legitimate out-of-pocket expenses related to your mum's care (eg petrol if you are taking her to appointments) as long as this is properly documented.

The risk you also run would be that, if there comes a time when your mum might need financial support from the Local Authority, they would regard payments to you as 'deprivation of assets' and therefore provide less support than might be needed. LAs have far-reaching powers to examine financial records going back over as many years as they feel appropriate.

So I think you would be wise to get some specific advice from the OPG before assuming that these gifts are permissible.

 

[Delphie]

In your shoes, I'd keep a record. You never know what might happen in the future and having evidence that everything's above board would be my safety net.

As far as the gifts... To be honest I don't know. I'm a Deputy, so I can't profit from the decisions I make (or words to that effect), on the other hand making customary gifts is allowed (if they're proportionate to assets) so that would put you in the clear! The sums don't seem too large either.

Personally I wouldn't take anything for myself and carry on gifting to brother, but that's just me, and I don't think you'd be wrong to accept something from your mum from time to time.

 

[tigerlady]

I have just got LPA for finance for my mum. I already manage all her financial affairs and am 3rd party on her bank account. I have not been keeping records of what I spend on her behalf. Should I do so now?
She also wants to keep giving me and my brother gifts of money. (Couple of hundred pounds every so often, to say thank you for caring for her. )
Should I accept these? The capital from her house sale is largely invested- the money gifts come from her income. She is not in a care home, nor is likely to be in the near future. She is under the threshold limit for inheritance tax. I don't want there to be any question of me taking her money.

A person can give money away from their surplus income, and as such I wouldn't think it would be considered deprivation of assets, as her assets are invested. I would think you are entitled to some of your mum's money in payment for caring for her, and if she is living with you, she can pay a share of the household bills.

You should really keep a record of what you spend on her behalf, but if the all the spending comes from her income, I don't see a problem, but as others have said -best to ask the OPG

This factsheet is mainly about gifts with regard to inheritance tax, which your mum wouldn't qualify for anyway but it does show what gifts can be given.

https://www.gov.uk/inheritance-tax/gifts

 

[JohnBG]

Paperwork

For your own protection it would be wise to keep a record, as mentioned my role is to care for my mother she does try to give me more than the shopping costs,so now I get her to pay for it. With the POA due soon she has a cheque book plus cash so perhaps that aspect of her independence will continue.

We do go food shopping together, although she can get confused with money or that not everything costs £20, as mentioned if her current gifting is in line with what she would do historically.

Good luck keeping her money safe.

John.

 

[jugglingmum]

This factsheet is mainly about gifts with regard to inheritance tax, which your mum wouldn't qualify for anyway but it does show what gifts can be given.

https://www.gov.uk/inheritance-tax/gifts

This factsheet is entirely about gifts for IHT, and nothing else, and what most people missunderstand is that it applies to gifts out of capital. Regular gifts out of income which is above what is needed for living expenses are exempt from IHT as IHT is a tax on capital and this is clearly mentioned part way down the article.

The OPs mum is below IHT threshold and the gifts are out of income.

As far as gifts to you when operating LPA, I think if the gifts are in line with what was given previously then there is no issue. My mum always gave myself my brother and our partners a reasonable cash sum for Christmas and birthday and I have carried this on, as it just follows what she did before. My mum is not currently in a CH, although with dementia you never know and would be self funding for many years.

As I see it the only way that anyone external would be interested in the gifts would be if another party is named in the will as a beneficiary or deprivation of assets was considered by the LA should your mum ever cease to be self funding. If the gift is proportionate to her income then she can give you the money would be my take on it.

 

[Pete R]

She is not in a care home, nor is likely to be in the near future.

If your Mum is never likely to need financial help from the LA to fund her care in the future, due to the investments, she can spend her money however she wishes and as LPA you can spend it in line with her wishes.

As LPA you may want to keep records of any unusual amounts you spend on her behalf and if you do accept gifts there is nothing wrong with this as long as it is in line with the past.

If she does need financial help in the future then she can still spend her money as she wishes as long as it is not for the purpose of avoiding paying for her care.

As "jugglingmum" says any problems can often arise from disgruntled relatives but if you have non.................

 

[netsy22]

This factsheet is entirely about gifts for IHT, and nothing else, and what most people missunderstand is that it applies to gifts out of capital. Regular gifts out of income which is above what is needed for living expenses are exempt from IHT as IHT is a tax on capital and this is clearly mentioned part way down the article.

The OPs mum is below IHT threshold and the gifts are out of income.

As far as gifts to you when operating LPA, I think if the gifts are in line with what was given previously then there is no issue. My mum always gave myself my brother and our partners a reasonable cash sum for Christmas and birthday and I have carried this on, as it just follows what she did before. My mum is not currently in a CH, although with dementia you never know and would be self funding for many years.

As I see it the only way that anyone external would be interested in the gifts would be if another party is named in the will as a beneficiary or deprivation of assets was considered by the LA should your mum ever cease to be self funding. If the gift is proportionate to her income then she can give you the money would be my take on it.

Thanks for this. Mum has always given us a couple of hundred pounds now and again when she feels flush, and I feel she is still capable of making that decision.

 

[netsy22]

If your Mum is never likely to need financial help from the LA to fund her care in the future, due to the investments, she can spend her money however she wishes and as LPA you can spend it in line with her wishes.

As LPA you may want to keep records of any unusual amounts you spend on her behalf and if you do accept gifts there is nothing wrong with this as long as it is in line with the past.

If she does need financial help in the future then she can still spend her money as she wishes as long as it is not for the purpose of avoiding paying for her care.

As "jugglingmum" says any problems can often arise from disgruntled relatives but if you have non.................

Thanks for this advice, I will keep records. At the moment she is stable and looks like not to be in need of CH for the foreseeable future.

 

[netsy22]

For your own protection it would be wise to keep a record, as mentioned my role is to care for my mother she does try to give me more than the shopping costs,so now I get her to pay for it. With the POA due soon she has a cheque book plus cash so perhaps that aspect of her independence will continue.

We do go food shopping together, although she can get confused with money or that not everything costs £20, as mentioned if her current gifting is in line with what she would do historically.

Good luck keeping her money safe.

John.

Mum still seems to have a grasp of the value of money, but has always been generous to us.

 

[netsy22]

If your Mum is never likely to need financial help from the LA to fund her care in the future, due to the investments, she can spend her money however she wishes and as LPA you can spend it in line with her wishes.

As LPA you may want to keep records of any unusual amounts you spend on her behalf and if you do accept gifts there is nothing wrong with this as long as it is in line with the past.

If she does need financial help in the future then she can still spend her money as she wishes as long as it is not for the purpose of avoiding paying for her care.

As "jugglingmum" says any problems can often arise from disgruntled relatives but if you have non.................

Good point!

 

[Tubbsy]

I find this thread very interesting; I have posted a similar one but whereas advice on this one seems to suggest gifts in line with her income/overall financial situation are ok, the advice I'm getting seems quite different! I was wondering if you've contacted the OPG and if so what advice they gave? Many thanks,

 

[Shedrech]

Hi Tubbsy
I haven't contacted the OPG about this issue - but I did about others
I phoned one day and was waiting about 20 minutes but it was worth it as they gave very clear advice
I also e-mailed once, and had a reply in about 10 days - again worth doing as I had a clear reply in 'black and white'
so I'd say contact them to settle your mind

 

[Katrine]

I find this thread very interesting; I have posted a similar one but whereas advice on this one seems to suggest gifts in line with her income/overall financial situation are ok, the advice I'm getting seems quite different! I was wondering if you've contacted the OPG and if so what advice they gave? Many thanks,

Hi Tubbsy. The difference here is that the OP's mum wants to make these gifts herself, and is asking her Attorney to assist her to do this.

Her Attorney has been appointed by the donor as the person she trusts to manage her financial affairs. You are applying to become a Deputy, where the powers are awarded by the Court of Protection. You will be a Deputy of the COP, with delegated authority from the Court. Your mum did not give you this authority.

Where powers are awarded via the COP, the level of supervision by the OPG, and requirement to seek advice and authorisation is much greater. I am my mum's guardian under Scottish Guardianship. I am required to seek authorisation for any item of non-routine expenditure over £100. I've never had it refused.

Nobody has said you absolutely cannot make gifts or loans from your mum's funds, just that you need to check with the Office of the Public Guardian, which is the body that oversees the work of Attorneys and Deputies.

 

[Tubbsy]

Hi Tubbsy. The difference here is that the OP's mum wants to make these gifts herself, and is asking her Attorney to assist her to do this.

Her Attorney has been appointed by the donor as the person she trusts to manage her financial affairs. You are applying to become a Deputy, where the powers are awarded by the Court of Protection. You will be a Deputy of the COP, with delegated authority from the Court. Your mum did not give you this authority.

Where powers are awarded via the COP, the level of supervision by the OPG, and requirement to seek advice and authorisation is much greater. I am my mum's guardian under Scottish Guardianship. I am required to seek authorisation for any item of non-routine expenditure over £100. I've never had it refused.

Nobody has said you absolutely cannot make gifts or loans from your mum's funds, just that you need to check with the Office of the Public Guardian, which is the body that oversees the work of Attorneys and Deputies.

Hi again Katrine....I didn't realise I'm applying to be a deputy of the cop, I thought I was just applying to be able to borrow some money, or do the 2 equate to the same thing?! I have power of attorney.....

 

[Katrine]

Hi again Katrine....I didn't realise I'm applying to be a deputy of the cop, I thought I was just applying to be able to borrow some money, or do the 2 equate to the same thing?! I have power of attorney.....

My sincere apologies Tubbsy. I totally misunderstood. I thought you were applying to be a Deputy because you didn't have POA. I apologise for any offence caused.

Edited: I misunderstood Tubbsy when he said on his own thread that he had forms to apply to the Court of Protection. I thought he meant he was applying for deputyship. I now understand that he already has POA and is seeking approval for a specific financial action that the OPG considers requires Court authorisation.

 

[Tubbsy]

My sincere apologies Tubbsy. I totally misunderstood. I thought you were applying to be a Deputy because you didn't have POA. I apologise for any offence caused.

Edited: I misunderstood Tubbsy when he said on his own thread that he had forms to apply to the Court of Protection. I thought he meant he was applying for deputyship. I now understand that he already has POA and is seeking approval for a specific financial action that the OPG considers requires Court authorisation.

No offence taken Katrine, don't worry! All the terms and jargon on here...easy to miss understand a thread/comment!

 

[theunknown]

Although PoA and deputyship are quite different, my understanding as a deputy in England is that gifts are definately acceptable if they're in line with what the person being protected would have given. I err on the cautious side and give about half the cash gift that my mum would have given for birthdays and Christmas (this is only to immediate family, and I don't give anything to myself). I'm filling out an inventory form for the Court of Protection for the first time and this may be affecting my decisions. Perhaps if I was further down the line I would be more likely to be a bit more generous in the way my mum would have been.

I definately agree with the idea that people need to keep all receipts, statements, invoices, etc that apply to the financial dealings on behalf of the client. You never know if or when you'll need to use them to protect yourself from false claims.