Protecting mum’s finances

Alibaba80

Registered User
Aug 4, 2017
49
0
Somerset
I’m looking for some advice about my 76 year old mum who was recently diagnosed with early stage Alzheimer’s. My Dad died last June and since then I have taken over all of her household management and bills. I have been added to her joint account but I’m worried about her money as she has already been close to being a victim of fraud. I’m considering opening a joint savings account to put the majority of her money in and not giving her the details.
I have LPA and have been thinking about her house. Should I consider getting her to transfer the house into my name? There is no mortgage so it would just be the deeds. I’m think this might save us loosing out to inheritance tax and/or if mum needs to go into a care home. Has anyone else done this and has it helped?
 

Beate

Registered User
May 21, 2014
12,179
0
London
You're looking for trouble if you're doing that. Have you ever heard of deprivation of assets? Everyone just thinks about tax, but this is really what you need to think about. Your mother has a dementia diagnosis and if she needed a care home Social Services will want to know why you took her property which should have been used to pay for her care. Plus, as an attorney you cannot benefit from your mother's assets like that.

The same goes for joint accounts. By all means, open another account for her, but it should be in her name only. As attorney you have the right to operate it so there is no need to add your name to it.
 

YorkshireLass

Registered User
Feb 15, 2017
222
0
Ilkley
I’m looking for some advice about my 76 year old mum who was recently diagnosed with early stage Alzheimer’s. My Dad died last June and since then I have taken over all of her household management and bills. I have been added to her joint account but I’m worried about her money as she has already been close to being a victim of fraud. I’m considering opening a joint savings account to put the majority of her money in and not giving her the details.
I have LPA and have been thinking about her house. Should I consider getting her to transfer the house into my name? There is no mortgage so it would just be the deeds. I’m think this might save us loosing out to inheritance tax and/or if mum needs to go into a care home. Has anyone else done this and has it helped?
Hi, I would be very careful especially regarding property that belongs to your mum. Transfering large sums of money or property can so easily be traced and most certainly will be going back into the history for many years if eventually you require financial assistance for care or when probate is required. Holding a LPA requires you to be trusted. You might find the information offered by AgeUK and Citizens Advice useful as a starting point followed by the Government guidelines/rules regarding acting as an attorney.
https://www.ageuk.org.uk/informatio...aying-for-care-support/deprivation-of-assets/
https://www.citizensadvice.org.uk/family/looking-after-people/managing-affairs-for-someone-else/
https://www.gov.uk/lasting-power-attorney-duties/property-financial-affairs
Hope this helps.
 

Alibaba80

Registered User
Aug 4, 2017
49
0
Somerset
Thank you I’ll have a look. The decision to move her money into a savings account is to protect her from fraud as she has been a victim of telephone fraud in the past. Can I access her account online if I am not named on the joint account? I live 180 miles away from her so I need remote access to her money and details of household bills.
 

Beate

Registered User
May 21, 2014
12,179
0
London
Yes, it's called online banking. Have you registered your LPA with the bank? You'll get you own debit card, cheque book and online access.

If your Mum still has her own debit card, scrub off the three digits at the back so she can never give out the full details over the phone or in person.
 

nitram

Registered User
Apr 6, 2011
30,075
0
Bury
I’m think this might save us loosing out to inheritance tax and/or if mum needs to go into a care home.

The implications of deliberate deprivation of assets has already been covered.
Regarding IHT the NRB is £325k and the MRNRB is currently £125K.
This means that if your dad left everything to your mum her NRB is £650k and the MRNB is an additional £250k provided that the beneficiary is a descendent. Total of £900k (PETs (potentially exempt transfers )can change things.

https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band
 

Kevinl

Registered User
Aug 24, 2013
6,050
0
Salford
Hugh can of worms really. I personally see what you're saying and understand perfectly well why on the face of it, it seems to be a logical option, however, if you take someone else's money and property into your possession then as an LPA you have benefitted, which at best is not allowed and at worst could be considered theft.
You do say "this might save us loosing out to inheritance tax" saying "us" implies others may be benefactors in her will, what might they say if they found out? If you put the house in your name and she has appointed solicitors as executors then they may need to house re-registering for them to be able to sell it, more time and expense.
Putting the house in your name won't stop the LA calling it a deprivation of assets and treating her as if she still owns the property, but it may prevent them from entering a deferred payment agreement so you may lose out on the 12 free weeks you get if you go down the LPA route and not be able to get a DPA forcing you to sell the house under pressure or finance her care yourself until you do sell and the money comes through.
Nitram has outlined the IHT thresholds, you could be somewhere near a million pounds before IHT kicks in, personally there is no remote likelihood that I would ever get close to that unless I win the lottery and as I don't buy a ticket that isn't going to happen, plus your mum would need to survive 7 years after gifting the house to you to avoid IHT totally.
K
 

Alibaba80

Registered User
Aug 4, 2017
49
0
Somerset
I am an only child so had to get LPA as there was no one else. So by default I would also be the only beneficiary. It was the Bank manager who suggested being added to mum’s joint account when Dad died so I’m already listed as such on both of her accounts. She signed the paper work to do that so I haven’t stolen her money! Also the savings account would be in both our names as well, purely so that she couldn’t be scammed out of all of her money.

Having researched transferring the house I can see that it’s not an option so will forget about that.
 

Beate

Registered User
May 21, 2014
12,179
0
London
No one said you had stolen her money but I would really advise against putting a savings account in joint names too. You are her attorney, you can manage the account without it, so there really is no need of opening yourself up to suspicions by Social Services. If the bank manager advised you to have your name added to her accounts, he obviously did not understand what an LPA is and what rights it gives you.
Adding a name to an account doesn't prevent scams but acting as a proper attorney does.
 

Alibaba80

Registered User
Aug 4, 2017
49
0
Somerset
With respect I’m not sure that scratching the number off the back of Bank cards is the best way of protecting my Mum. I didn’t have LPA when my Dad died in June and the accounts were transferred to joint name, I only got that in December before she was diagnosed in February.
 

Beate

Registered User
May 21, 2014
12,179
0
London
It's what's commonly recommended on this board so if any fraudster wants her to read her card details to them, they won't be able to get far without those three numbers on the back. You don't need to take any of our advice but it's tried and tested, and with respect, we're trying to help you.
 

Duggies-girl

Registered User
Sep 6, 2017
3,620
0
It's what's commonly recommended on this board so if any fraudster wants her to read her card details to them, they won't be able to get far without those three numbers on the back. You don't need to take any of our advice but it's tried and tested, and with respect, we're trying to help you.

I am going to do it to my dads card. It is the phone scams that worry me as he is very vulnerable and could so easily be conned. I think it is good advise.
 

LynneMcV

Volunteer Moderator
May 9, 2012
6,110
0
south-east London
I am going to do it to my dads card. It is the phone scams that worry me as he is very vulnerable and could so easily be conned. I think it is good advise.

Yes definitely good advice.

In the early days my husband was signing up to all kinds of things over the phone and at the door when I was at work. Removing those digits saved us a fortune.
 

JBK

Registered User
Feb 25, 2018
47
0
Does anyone know if a spouse can be classed as a third party when it comes to deprivation of assets? Eg, if a sum of money is transferred from sole account to joint account with spouse.
Feeling a bit confused......as usual!!
 

Kevinl

Registered User
Aug 24, 2013
6,050
0
Salford
Does anyone know if a spouse can be classed as a third party when it comes to deprivation of assets? Eg, if a sum of money is transferred from sole account to joint account with spouse.
Feeling a bit confused......as usual!!
In a word, yes. It's the other parties money and putting it into a joint account makes it joint property so you have taken something that belonged to them and now they only own half of it from a deprivation of assets point of view or should they pre-decease the joint account holder then you would own all of it. It might be OK if you transferred a similar amount of money into the account for joint living expenses and the like but if you move someone else's money into a place where it no longer theirs is not really on.
K
 

JBK

Registered User
Feb 25, 2018
47
0
In a word, yes. It's the other parties money and putting it into a joint account makes it joint property so you have taken something that belonged to them and now they only own half of it from a deprivation of assets point of view or should they pre-decease the joint account holder then you would own all of it. It might be OK if you transferred a similar amount of money into the account for joint living expenses and the like but if you move someone else's money into a place where it no longer theirs is not really on.
K
Thanks for that....sorry but told you I was confused !:(
I should have said if a person still has capacity & wished to do this would this still be classed as deprivation of assets
 

fortune

Registered User
Sep 12, 2014
146
0
One of the very few bits of clear official advice for attorneys is to keep your money completely separate from that of the PWD. I am attorney for my mum and I have my own bank account in my own name and mum's bank account where the name is 'Jane Smith attorney for Mrs B Smith'. It sounds like you are in the tricky grey area where your PWD still manages some money themselves. I got round this by having an account with a cash card which mum used, but I just put in a reasonable amount every week, so she could do a bit of shopping, go out to a cafe etc. It worked well til my sister got hold of the card and the pin. But not long after that it became clear mum could not really handle money at all. At which point I took over doing everything financial. By strange coincidence at about the same time the number of casual 'visitors' dwindled rapidly.
 

Carolyn B

Registered User
Apr 29, 2018
49
0
North West
Ditto the above all good advice.

I am in the process of getting an LPA in place for my mother. I have had dealings professionally with LPA frauds. Keep everything separate from you ! I am going to keep a record of any money that I pay in or take out to justify all transactions. On a bank statement there isn't always enough detail to show what the transaction is. Hopefully her bills will be clear and it' just the odd expenditure for new clothes etc.
 

Alibaba80

Registered User
Aug 4, 2017
49
0
Somerset
Thanks Carolyn, I never pay any money in as I don’t use it as my own bank account. However last time I visited Mum we went out shopping and she couldn’t remember how to pay with a debit card. I ended up paying from my own account so transferred the money online afterwards. I’ll try to remember to take the debit card for mum’s account with me next time so that I can pay directly from her account.
Do I actually need to take the LPA to the bank? I still don’t really understand how I actually go about using it!
 

Baker17

Registered User
Mar 9, 2016
3,382
0
Thanks Carolyn, I never pay any money in as I don’t use it as my own bank account. However last time I visited Mum we went out shopping and she couldn’t remember how to pay with a debit card. I ended up paying from my own account so transferred the money online afterwards. I’ll try to remember to take the debit card for mum’s account with me next time so that I can pay directly from her account.
Do I actually need to take the LPA to the bank? I still don’t really understand how I actually go about using it!
Yes you do need to take the LPA to the bank x