a loan from Mums estate!

[huntsu1]

Can I please ask for advise on a situation we now find ourselves in, just a bit of background;

My husband and his brother have joint POA (NOT severally). We found mum a fantastic (but very expensive £60,000 a year)where she is settling in slowly. We are in the process of putting her home on the market and hope we will realise enough to keep her in the home for about 10 years (she's 84 but other than the AZ she's as fit as a fiddle)

My BIL has asked to have £10,000 from Mum's estate as he is financally strapped, he made it quite clear that if Mum was OK she would have no problems with this (as he is probably right - he's had enough loans(not ever been repaid) in the past) but now the circumstances are very different. We need all her capital to work for her, we realise that SS wont pick up her bill once she has run out of funds and cannot contemplate the thought of where she may end up.

He is offering to pay it back should she need it when her own funds have run dry!! Although we have told him it is not possible for him to access any of her money for his own gains and both brothers have to be in agreement he is going off to see if he can find a way round. We do not want to contact the public guardianship office unless absolutley necessary as this could result in revocation of the poa and all that intails.

 

[jenniferpa]

Your BIL is one of the ones with the POA?

I don't know how you'd feel about this but:

What if it was set up as an actual loan with a regular repayment schedule and a rate of interest? I would say if he has a history of not repaying loans then you absolutely should NOT go with the "I"ll repay it if she needs it", since it seems extremely unlikely that 1) he would do it and 2) that he could do it. A properly drawn up loan, though, that protects your MIL (and her estate) and keeps it all above board. Furthermore, should she die before the load is repaid, it really should be taken out of your BIL's share of the estate - why should you and your husband be penalized for his fecklessness?

I don't have siblings though, so I can afford to be hard nosed about it.

 

[Natashalou]

My observations would be
A) dont forget how fast the care home fees will probably rise. In less than a year Ive seen around a 10% increase on my mums fees and they are set to rise again in september..I had initially thought we would have enough for ten years funding buts its become clear that the money will run out a lot quicker.
B) if you erode the capital, even if an agreement as Jennifer suggests is set up you would need to be sure the interest paid but your relation compensated for the interest she would be losing..so why doesnt he just go to the bank?
c) Even if such an arrangement is agreed if he then just ignores it..and doesnt pay up this might lead to a very difficult situation all round!!

My personal view is that as POA the responsibility is to protect her asetts..and if this guy already has a history of not paying back, well to make him a loan isnt really doing that is it?

 

[jenniferpa]

I've realised I might not have been clear - if there was a loan given from the estate, I do think it should be paid back (interest and principle) on a monthly basis just as if it was a loan from a bank. Mind you, I'm with Natashalou on this point: if he has a poor track record with money, making a loan is not being fiscally responsible with your MIL's money. I suppose my hope is that if the offer is made but with the strings I've mentioned - repayment to start immediately and a commercial rate of interest because you "have" to protect her money, maybe it will put him off without a major family row.

P.S. Although nothing is certain I think there is a vanishingly small possibility that he could get round this. In fact, I think even if you were in agreement for a loan of this magnitude you would be expected to get agreement in advance from the COP anyway.

 

[Helena]

MIL must have a huge house or estate if you think it will fund what is today a £60,000 a year NH

Generally it seems most peoples home values would be wiped out in 4 years or less of NH fees and ironically i have been told on pretty good authority that the day their money runs out and SS should chip in is the day they die

 

[Louise.D]

That a really hard one, whilst you don't want to see BIL strapped for cash you don't want to compromise her capital.

I cared for my mother whilst she was in a care home, I visited her evey day, fed her and attended to her other needs. I didn't have to but I felt it was my duty and I wanted to. She's my mum and I loved her As I was unable to work the financial strain was huge.

Could you ask him to make monthly repayments? You could set it up so she won't have to pay tax on the interest earned. Every little helps.

If he's terrible with money and there's no chance of him paying it back I would refuse. If you wanted an easy way of saying no you could always ask COP (to avoid a row) I've often rung them rather than putting it in writing.

Louise

 

[alfjess]

Hi Huntsu1

I am sorry, but I don't agree with the previous posters.

Maybe, this is because I know MY brother too well. He borrowed money from Mum and Dad every week and as far as I know, never paid half of it back.

Now he says he cannot visit them in their care homes (still getting £270.00 per month) because he has no petrol money.

If he asks me for their money, I refuse, on the grounds, I have to be accountable for every penny of my parent's money and he is already in receipt, fraudulently, of £270.00 per month belonging to my parent's.

I have POA. my brother hasn't, but I think you have to be very careful in how you spend money, which doesn't belong to you and at the end of the day, if funds have been misappropiated, then your brother will be accountable.

Hope you get this sorted
Alfjess

 

[huntsu1]

Thank you all for your quick response, the situation is difficult because he (my BIL) is the other half of the POA, he wants the money without having to re-pay (unless she needs it) he was very angry this evening when he rang. My husband is going to ring the PGO tomorrow morning.
I am so disappointed (although not surprised) by my BIL action, he should never have put his brother in this position, when the POA was first set up he read the guidence notes and his mother made it quite clear that she wanted both sons to have joint POA.

 

[Grannie G]

I firmly believed my mother`s money was hers as long as she lived and although I had a POA would not have dreamed of using her money for anyone other than her.
I think your BIL should be told in no uncertain terms that he is not at liberty to `borrow` money from his mother. Her needs are greater than his.

 

[jenniferpa]

Thank you all for your quick response, the situation is difficult because he (my BIL) is the other half of the POA, he wants the money without having to re-pay (unless she needs it) he was very angry this evening when he rang. My husband is going to ring the PGO tomorrow morning.
I am so disappointed (although not surprised) by my BIL action, he should never have put his brother in this position, when the POA was first set up he read the guidence notes and his mother made it quite clear that she wanted both sons to have joint POA.

I don't suppose you were surprised at his anger, but it doesn't make it any easier to deal with. The fact of the matter is, though, that morally and legally, your husband can't do what your BIL wants anyway. The rules are quite clear - it's the donors money until the donor dies and it has to be treated as such. The fact that she might have given it to him is irrelevant - if she was able to make the decision she probably wouldn't need the money.

I'm so sorry for your husband - it's hard enough doing this without dealing with family members who are out for what they can get.

 

[huntsu1]

Thanks again for all your comments, pleased to report hubby has phoned the PGO this morning and spoke to a very helpful lady and it is as we thought. He can apply through the court for a loan from Mums estate, if this was granted (she thought this most unlikely) he would have to sign an agreement to pay back with interest in a agreed timeframe.

He has now been told this and what he does is upto him but I dont think he will pursue it any further as he had no intention of paying it back let alone with interest. I know blood is supposed to be thicker than water but he is really pushing the limits.

 

[Grannie G]

Good news. Now you can relax.