A question about DPA's

Discussion in 'I care for a person with dementia' started by Greyone, Jan 24, 2016.

  1. Greyone

    Greyone Registered User

    Sep 11, 2013
    381
    Male
    UK
    Since our latest financial advisor never mentioned DPAs and juts worked on a nodding assumption that we would have one as opposed to just selling our mother's house, I am asking exactly how DPAs are arranged. if you agree to one , do you just get a large cheque for say £150K and are told "there you are , that'll keep you going for a few years", you pay it into your mother's bank account and let it be whittled away for a few years with the expectation that you will then either sell the property of be in a situation that means the council will write it off.

    Can somebody just explain to me how a DPA works operationally, over its life time ?

    THX
     
  2. Beate

    Beate Registered User

    May 21, 2014
    11,713
    Female
    London
    #2 Beate, Jan 24, 2016
    Last edited: Jan 24, 2016
  3. Katrine

    Katrine Registered User

    Jan 20, 2011
    2,850
    England
    #3 Katrine, Jan 24, 2016
    Last edited: Jan 24, 2016
    Here's another link:
    http://www.local.gov.uk/documents/1...s+AM.pdf/3ce0348f-586b-4328-b556-79a0f1a2ad90

    It reads to me that the Council pays the CH fees, and these can include reasonable top-up charges if the Council thinks the person's estate will cover those. It is a loan that accrues, as time goes on and more fees are paid.

    An agreed interest rate is set for the loan. When the person dies their executors have to repay the sum loaned, including interest charges, from the person's estate. The Council will have set a maximum percentage to be loaned against the property value (e.g. 90%), so that there will be sufficient in the estate to pay all legal fees and other costs such as burial expenses.

    The residual estate can only be distributed to beneficiaries once all debts have been paid.

    Each local authority now seems to be publicising the DPA option on their individual websites. Check to see if your Council has done this.
     
  4. Pete R

    Pete R Registered User

    Jul 26, 2014
    2,046
    Staffs
    Hi Greyone, I am going through the process at the moment with my LA. Other LA's may vary but I imagine the process is the same.

    The LA value the property, it doesn't have to be exact, they take off 10% and £14250.
    They will agree with you a weekly amount that they will pay towards CH fees minus the normal pensions/benefits. It could be the whole amount (it doesn't have to be), including top ups but it will be decided on each case depending on the value, the costs, life expectancy etc. They can also increase the Personal Expenses Allowance up to around £144/week if you wish This is for insurance/maintenance costs on the property. Part of the agreement is that the property is insured and maintained.

    There are set up costs as legal documents with the land registry are amended to show the LA have a charge on it. This will show up to any anyone who wants to buy the house whilst the agreement is in place. You may also have to pay for a letter from the GP regarding capacity. All those other tests that have been done don't count.:rolleyes:

    Any other set up charges including any interest charges which is fixed for the duration will be clearly set out in the documents you sign. You may be lucky and find your LA like mine have yet to set any charges. This again is fixed and cannot change. The LA are not supposed to profit from the agreement.

    The LA, if they haven't already, contract with the CH and pay the agreed amount. Obviously depending on what you opt for there may still be top ups to pay.

    My LA send me a quarterly invoice/update showing how much they have paid/how much is owed.

    Hopefully your Mother will have many more years left. As the amount reaches the agreed total the LA should be in touch to see what your plans are then.

    The money becomes repayable on death or sale of the property. You can repay the money from any source, you do not have to sell the property. You can terminate the agreement at any time and pay off the debt.

    The documentation is very "legal" so you may wish to consult a solicitor and if there is interest you may also want to speak to a financial advisor.

    Hope that helps.

    :)
     
  5. Greyone

    Greyone Registered User

    Sep 11, 2013
    381
    Male
    UK
    Hi Beate thanks for the advice and two links, I appreciate your input. I'm sure all the replies will take me some time to digest , but i'll post again soon. Thank you.
     
  6. Greyone

    Greyone Registered User

    Sep 11, 2013
    381
    Male
    UK
    Katrine. Thanks for the document as well.
     
  7. Greyone

    Greyone Registered User

    Sep 11, 2013
    381
    Male
    UK
    #7 Greyone, Jan 25, 2016
    Last edited: Jan 25, 2016
    Hi Peter R.
    As always , many thanks for taking the time to help me out once again and I hope all is not lost with you. I really cant thank you enough for sharing your experience here.
    Our whole process is going slowly because we've had to go the deputy rather than LPA route and we have yet to get access to our mothers money. But hopefully that will be sorted out this Saturday.

    I'll post again very soon if I have any questions. For now thanks.
     

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