Record keeping

[Lynmax]

We have just started using Mums bank account as LPA attorneys and I'm not sure how much record keeping we need to do.

It is only bank transfers to repay us for purchases we've made on our own cards online or debit card transactions as we have our own cards for her account. These are mainly small amounts, less than £40, for food shopping or meals out - we try to ensure that mum has one decent meal a day and I encourage her to go to a cafe with me as I think it is important for her to get out of the house!

I keep a record of all these transactions so I can check the online bank statements but do I need to do this and if so, do I also need to keep the receipts?

Thanks

 

[marionq]

I asked that question of a social worker a few years ago who came to do a financial assessment. At the time it was looking as if John would have to go into care but in fact he’s still here with me. Her answer was that there was no need to be “too pedantic” as a reasonable expenditure on food etc would be assumed and only a large amount of money going out of his account would be questioned. Since then I haven’t bothered and carry on spending as I think fit. As we don’t gamble smoke or drink excessively and five days a week I’m stuck at home with him then there is little opportunity for outrageous spending.

 

[Shedrech]

Hi @Lynmax
for dad's accounts, I kept the paper monthly statement and annotated each unexplained payment (most were by direct debit) with very brief info eg food shopping, cafe, clothes, to X for food, cash for cleaner .... only keeping receipts for large payments eg to plumber for work on bathroom

It was easy to do and easy to show that all outgoings made sense and were accounted for

 

[Banjomansmate]

I have paper statements for The Banjoman’s bank account and write on them what any unusual payments are for so that if I need to provide copies for any official purposes i.e. benefits etc. there is a written record.
I ask him if he is happy with me sending money to his daughters for Birthdays and Christmas and agree an amount. All the while he has capacity to make those decisions I will keep him in the loop but once he can no longer let me know his wishes I know what he would have done.
Now he is in residential care I use his account to buy food treats, biscuits and drinks that I know he will enjoy but that aren’t supplied by the home. When he lived by himself I would take ready meals and other food in that I bought with my card on his account, he would still go shopping at his village store or go out for a drink or meal with family or friends using his debit card. I couldn’t account for every penny but just accepted what he had spent.

 

[McBeagle]

I would agree with @Shedrech. Keeping annotated bank statements won't take too much time and could prove invaluable if anything was ever queried in the future. One thing to be especially careful about however is gifts. Definitely keep a good record of any small birthday / Christmas gifts made and remember that you need Court approval before making any bigger gifts.

 

[Lynmax]

Thanks for this advice. We don't get monthly statements but I guess I could print one off in order to annotate it. That seems easy and I wouldn't need to keep all the receipts for small regular payments.

Gifts is a bit of a sore point at the moment! I was telling my mum about my sons need for £6000 to pay some divorce costs - he lives in the US. My mum said she would give it to him but I had to refuse as it wouldn't be appropriate for me to take that amount from her bank account even though she could afford it. I feel a bit sad as a few years ago she gave two other grandchildren significant amounts of money to help them buy houses but her younger ones will now miss out on her generosity.

 

[Banjomansmate]

All the while The Banjoman has some capacity I do what he asks me to, as far as I am concerned I am acting on his behalf because he struggles with using the phone for telephone banking. If he asked me to give money to his daughters for a reason that he understood and the money was there then I would do so. Your mother sounds as though she still has enough understanding to gift money to her Grandson however she would be limited to the annual gift allowance which, I think, is £3,000 now.
I appreciate that people will now tell me that this is considered against the rules of LPA as the donor’s assets must be used for their benefit but if you know that the action is what they want or would do when they were functioning 100% normally then to me that is for their benefit because it helps them feel as though they are doing what they would normally and they still have some control over aspects of their life and money. Just because the LPA has come into play it doesn’t mean the donor is immediately incapable of deciding what they want to do with their money.

 

[Lynmax]

Interesting thought Banjomansmate, I'll reflect on it for a while.

Does anyone know what the potential consequences are of gifting more than the taxable annual limit? I'm asking from a personal perspective.

 

[Louise7]

The £3,000 yearly gift limit applies to inheritance tax. This link should answer your queries: https://www.gov.uk/inheritance-tax/gifts

Gifting large sums when someone is likely to need their money to pay for their care is completely different, and may be deemed as deprivation of assets.

 

[Grannie G]

I kept receipts for everything, for both my mother, my husband and the next door neighbour I helped care for.

I don`t think we can be too careful when spending other people`s money.

Does anyone know what the potential consequences are of gifting more than the taxable annual limit? I'm asking from a personal perspective.

Even the taxable annual limit may have consequences if care home fees need meeting by the LA.

 

[Lynmax]

Grannie G, it will be a long time before care fees need paying by the LA as mum has a good pension, a large amount of savings and a house to sell. However, I am still conscious that we need to be mindful of how her money is used.

 

[McBeagle]

Here are links to the OPGs guidance / rules on expenses and gifts:

https://www.gov.uk/government/publi...pg2-giving-gifts-for-someone-else-web-version

https://www.gov.uk/lasting-power-attorney-duties/property-financial-affairs

 

[McBeagle]

Gifts are often a real flash point and are one area where you'll be well advised to follow the rules to the T

 

[Banjomansmate]

Useful links McBeagle, thanks.