Charity giving.

[Jasonette]

Hello , its a long time since I was on here . Ive been having a rest since my mum passed away . I now find myself heavily involved with caring for a neighbour of hers who has the beginnings of dementia. He has seemingly perfect reasoning , but his short term memory has deteriorated to the point he wasnt safe at home .

My issue is, that he has always given to one or two charities on a regular basis. Maybe £150 to £200 a month to one of them and 5k maybe once a year to the other.( Has no relatives ) He is now in a nursing home , and wants to continue his charity giving , asking me to do the cheques/transfers for him . I dont have poa (I will be considering this) but I do have legal third party on his account so I can pay bills online etc. and handle his property sale.

He is self funding, and has enough to last for maybe 4-5 years care depending on how much it goes up. He is in poorish health at 85, but who knows how long he could last - He is worried his fav charity will end up with next to nothing after his few personal bequest totalling around £15k have been distributed. (The charity gets everything except those bequests) so is determined to give them as much as possible in the meanwhile!

Im wondering about how much he could be allowed to give before hes accused of self deprivation of his funds. He think its totally unlikely he will last beyond a couple of years and says he doesnt care what they do with him if his money runs out if he should happen to live five years or so. Not sure how to help really. He wont pay for a solicitor (who may or may not be helpful) and asking the LA would have an obvious, but not necessarily honest answer ! Any thoughts please?

 

[Witzend]

It does seem rather a lot that he is giving away, but OTOH if he has capacity, is still anxious to do it, and is able to self-fund for 4 to 5 years, then personally I would not try not to worry too much about what might happen in the future. At this stage I would certainly not think it is any business of the LA. It is not as if he has suddenly started giving large sums to some friend or relative who's popped up out of the woodwork and thinks he's a soft touch.

 

[Katrine]

If he does outlast his money then I would think the LA would consider this level of giving to be deprivation of assets and would seek to place a first charge on his estate. That would mean that his beneficiaries could lose out in favour of the LA's debt for care fees. This is just my opinion, I could be totally wrong.

If he has always given this much it could be argued that this is customary spend. It depends how long he has done it and whether the level of his assets has changed significantly in recent years, such that this level of giving is no longer reasonable.

If I were you I would check that he has Gift Aid in place for his charitable giving. That's the easiest way to give more to charity. However, there are rules about how much can be recovered in tax relative to the actual tax that he is paying.

I would also encourage him to have a monthly standing order to all his charities. It looks far better from your POV to manage this rather than justifying a sudden large lump sum donation once a year. You also need to get him to sign a letter authorising you to manage these gifts, with his expressed wishes being clarified, so that you have evidence to protect yourself.

I would also look into a Care Plan annuity (see another recent thread). The break-even point for these is about 4 years, so he might not like the idea of investing a lump sum this way to protect his care needs, rather than the charities getting the most they can.

TBH, he is understandably naive about his own need for funding. If you take on the role of Attorney you will have to balance his best interests with his expressed wishes, which may be in conflict. Until he loses capacity you would feel obliged to act more on the side of wishes than needs, provided that you had sought appropriate legal and financial advice. After he loses capacity you would, potentially, change things to protect his assets and let the charities wait for their share of his estate. This might be painful for you, since he trusts you to carry out his wishes.

I have cancelled nearly all of my mum's direct debits to charities. Four charities will share 50% of her estate. In the meantime her care costs are high and she needs the money, so I have protected as much of her capital as I can. People have a way of confounding medical predictions. Seven years ago she was expected to live 2-3 years at most. She is now 90 and still going strong.

 

[Jasonette]

Thanks to both of you for your thoughts. Its a tricky one isnt it really .Id hate to think of him chucked out in 5 years to a 'lesser' home though, so Im thinking I have to err on the safe side. I think we will have to come to some sort of compromise and send far lesser amounts . Of course I suppose now his memory has failed, I can kindly mislead a little saying its not long since we made the last donation .

 

[Katrine]

You could check what date he last paid the large annual donation and set up a monthly standing order to come into effect 12 months from that date. Maybe lose a nought off the end at the same time!

 

[Jasonette]

Indeed, thats an option to consider , thanks Katrine !