Managing my mums finances

[Monkeygirl]

Hi.
At the end of last year my brother and I had to make the heart wrenching decision for my mum to go into a specialist care home. Its been a really upsetting few months as I am sure everyone can appreciate.
My brother & I have Lasting Power of Attorney and in amongst everything we have had to sort out, we felt we were left with little choice but sell my mums beloved (and our childhood) home. We are both pretty risk adverse and as our mum had spent years scrimping and saving to pay her mortgage we didn't feel that we could take the risk of taking out a deferred payment scheme with the council and then having to sell the house within the 90 days that they expect settlement to be made within.
So the house has now sold and is due to complete within the next couple of weeks. My brother manages my mums bank account and obviously the proceeds from the sale of Mum's house will be used to pay for her care. However, being so risk adverse, especially as this is not our money, we don't want to put the total amount of the sale into one bank account as we know that banks only guarantee £75,000 in the event of a crash.
We originally planned that the sale amount would be split between the 3 of us; my mum, my brother and myself. This will keep us within the £75,000 tolerance if we are careful which banks we choose to keep the money in. However, does anyone know, can we do this?
Our solicitor who is dealing with the sale thinks that the money on completion can only be paid directly into my mums bank account. We would then have to transfer the money into different bank accounts. However, we are concerned that any movement of this money into different accounts (that will not be in my mum's name but in our names) will be frowned upon.
I am going to contact the citizens advice bureau but wondered if anyone had had a similar experience?
It all feels very stressful at the moment and on top of everything, we don't want the stress of making the wrong decision.
Any help would be very gratefully received. Thank you.

 

[LilyJ]

My husband has POA for his mother's affairs and when he sold her house he opened two extra bank accounts, so three different banks, in her name for this very reason. It doesn't stop her repeatedly asking where her money is but at least it is reasonably secure - unless something disastrous happens in the financial world!
I hope this helps.
L

 

[canary]

There is nothing to stop you using POA to open up new bank accounts at other banks - in fact it would be a good idea, for the very reason that you have said - but the accounts have to be in your mums name. You cant transfer your mums funds into accounts in someone elses name. If you do this then legally the money becomes theirs as a gift and you cant use the POA to benefit yourself or close relative. I know that you will consider this money as your mums, not yours, but legally thats not how it is. It would also fall foul of Deprivation of Assets. Just open the accounts in your mums name.

 

[Kevinl]

we didn't feel that we could take the risk of taking out a deferred payment scheme with the council and then having to sell the house within the 90 days that they expect settlement to be made within.

Hi Monkeygirl, welcome to TP
As you are an LPA then you should not put any money into an account in your name or even a joint account with your mother it would be breaking the rules. As an LPA you're not allowed to benefit financially and even if you expected to the return the money in the future holding it in your name wouldn't be allowed.
Paying money into a joint account is a little more complicated, the money automatically passes to the survivor so again you could be seen as benefiting.
Just open an account in 3 different banks each in your mother's name with either you or your brother as an authorised signature no them.
I don't know where your solicitor is coming from, it won't be "frowned down on" it will be a clear breach of your duty as an LPA to put any of it in anyone's name but hers.
K

 

[jenniferpa]

Spreading the money out so you don't have all your eggs in one basket is a good idea, transferring your mother's money to accounts in your and your brother's name is not. You have an LPA: set up new accounts in your mother's names.

What if one of you (god forbid) was sued? Or went bankrupt? Are either of you married? Then your partner(s) would have a claim to this money. And frankly, it simply looks bad.

 

[love.dad.but..]

I had poa for dad and sold his house last year and split the proceeds across 6 institutions which was time consuming but necessary to protect his money with the £75k in mind. This amount has been increased to £85k I believe. Dad sadly died recently so with probate have been back round the institutions gathering all the funds back in. I think you will find that you should legally only open or place your mums money/house proceed funds in accounts of her name with you or your brother named as poa if she has lost capacity to handle her own financial affairs, presumably you had to act in the house sale in your attorney capacity as I did for Dad. If she pays tax don't forget to open or top up an ISA and use premium bonds. I was quite quick last year with the house proceeds and got reasonable albeit fairly poor interest rates online accounts sometimes won't allow attorneys to access and I found High St options fairly limited.

 

[Beate]

Since January of this year, the amount has actually increased to £85,000 per financial institution, and it's important to know that's not the same as a bank. You might for example think that you can put £85,000 into Halifax and £85,000 into Bank of Scotland but they both belong to the same banking group. Likewise with HSBC and First Direct for example. It's explained very well here:
http://www.moneysavingexpert.com/savings/safe-savings

Btw, you don't have to hurry with your decision, you have 6 months grace:

"For those with very large amounts of savings (for example, from a house sale) there's now a temporary six-month £1 million limit. This only applies after a 'life event' has caused you to have temporarily high cash balances. Life events can be house sales, inheritances, compensation paid, insurance policies & several other events. If you do have a claim while you're protected by this temporary limit, you'll need to prove where the high balance came from for the claim to be approved. You would then have to wait up to three months for the FSCS protection to pay out."

And as others have said: you cannot put any of the money in anything other than your mother's name. You don't need to go to the CAB for that, they are only going to tell you the same. When you open new accounts for her I wouldn't look too much into interest rates as they are mostly rubbish anyway, but into ease of access with an LPA, preferably with Internet banking.

 

[snorkmaiden]

You could look at a National Savings and Investments account, they are backed by the treasury and guarantee that all your investments are 100% safe (unless the whole UK goes bankrupt of course ) x

 

[Monkeygirl]

Thank you

I really appreciate all of your replies. They are incredibly helpful and I thank you for taking the time to share your experiences.
Best wishes

 

[lemonjuice]

You could look at a National Savings and Investments account, they are backed by the treasury and guarantee that all your investments are 100% safe (unless the whole UK goes bankrupt of course ) x

i thought this was worth a look myself, but apparently the 'higher rate has dropped dramatically and is only offfered on the first £3000. Disappointed as not so much use for larger savings, such as the sale of a house.

 

[love.dad.but..]

Further to my earlier post in spreading dads house sale proceeds last year, keeping in mind the protection amount each institution or umbrella of several institutions, I also considered and went for a mix of 2 year fixed bonds paying slightly higher but locking away funds I knew dad wouldn't need care home fee wise in that time, 1 year accounts, as a dad was a taxpayer NSI premium bonds, ISA and easy access savings accounts to top up regularly his current account to cover monthly care home fees. Needed a bit of legwork but felt had placed his money as best as I could for him.