doing the right thing by my mum

[MrsChristmas]

Hi there

Please can I ask for some advice?

My mother was diagnosed with mild dementia in May 2016 and has refused all outside care. My brother and I care for her between us.

My mum looks after herself totally and just needs help with delivery of food and the running of her bungalow.

I have to be objective here by saying that she has deteriorated over the past year (she nearly 92) in that she does not retain any information now but I can hold a conversation with her just.

My later father left mum very well looked after financially and Mum had agreed for an LPA to be set up for both my brother and me to use when the time came.

I have not got involved with Mum's finances and it has been left to my older brother to deal with those affairs. Mum just felt more comfortable with him dealing with her money. I trust my brother, or I did until tonight.

My brother is involved with selling his house and buying a new one. He has just told me that due to a break in the chain it means that he would have buy two houses or, in effect, arrange bridging loan. My brother has just spoken to Mum asking if it would be okay to borrow £250,000 from her to cover the housing short fall. Of course she's agreed to it, on the provisio that I sanction it as I am the second signatory on the LPA.

He has spoken to me about this to see if I am okay with it and I told him I was, of course. He said that he would need to speak to Mum's Solicitor and set the wheels in motion and that it could be that I would need to sign an agreement. I want to help my brother, its family.

I pointed out Mum's memory issues but my brother thought the Solicitor would simply just see Mum and he/she would decide if she has capacity to agree to hand over quite a large sum of cash. I told him I thought that the Solicitor would want to see mum'medical records and maybe have Mum capacity re-assessed.

I felt that I was throwing up to many objections but I suppose my gut feeling is Mum doesn't really know what she is agreeing to and just wants to help her son.

I have since thought about it and I am thinking would my brother have asked this amount from my father if he were alive? Is my brother taking advantage of the knowledge that Mum is wealthy, trusting an vulnerable? Or am I just being cynical? I would like to think that my brother has my mother's best interests at heart.

After the discussion with my brother he said that he wanted to take time to think about it, after I pointed out mum's failing memory.

Should I agree to support my brother's request for me to agree access to funds or should I stick to my guns around my doubts around mum's capacity?

Mum will not go to the GP around her memory, she just buries her head in the sand.

 

[Kevinl]

Buy the brother's new house in your mum's name only, then when he gets the cash to pay her back transfer the house into his name, until he pays up it's her house.
That way the money/property is always in your mum's name, as an LPA he can't benefit so if he pays a reasonable rate of interest then he hasn't benefitted, not paying any interest would be a break of the rules.
Or if he wants to live in the new house owned by your mum he can, just pay a fair market rent until he sells his house.
No way should ownership of money or property go into the name of an LPA, so if mum buys the house now he can buy it off her later when his sells his house and whether he pays interest or rent to her means he hasn't benefitted from the transaction, so nothing to report to the OPG as it's all above board.
If he's anything less than honest why could he object?
K

 

[Lemondrop]

Be your mums advocate no matter! You are standing at that crossroads of what you know your mum would want versus someone thinking they know. Don't be pushed by emotion at this time...tell your brother to slow down...let it be, let it be! He can wait for a new house! Your mum has only precious time left with you all....be strong, you don't need anyone forcing their selfish interest at this time....just my thoughts xx

 

[MrsChristmas]

Hi there

Thank you for that reply...it really helped.

I expect that my brother would be responsible for all of the solicitors fees, estate agent fees and so on, even though his new property would be in mum's name?

I think the property that my brother has in mind is more than £250,000. He says that he cannot afford to pay the full amount as his money is in non liquid assets. My brother says that he may not even have to borrow the money because the house sale may go through with no problems. He's only spoken to me because Mum specifically asked him to, out of courtesy to me.

I suspect that this arrangement is between mum and my brother but he does not see Mum as much as I do and I suspect he is not aware of how much her memory has deteriorated.

I want to make that I say the right things to my brother if he brings up the subject again.

I think its a great idea to put his new house in mum's name and so on but the challenge will be is for to her understand.

You are right though, the test will be if my brother agrees to 'his' new property not being in his name, having to pay rent or interest on a loan is something he may not have even considered.

I let you if I do hear back from my brother over the next few weeks and his reaction to your suggestions.

 

[Kevinl]

At 92 your mum seems very switched on, if she loans 25% of the money on a £1 million pound house then the land registry should show her as having a 25% share of the house. If your brother doesn't ay a commercial rate of interest he's in breach of his LPA as he's benefitting from being an LPA.
Given the amount involved a formal repayment agreement and an acknowledgement this is s debt on his behalf is the minimum I'd accept, should something unexpected happen and your mum passed away or loses capacity then undocumented loans are a minefield and a lawyers "feeding ground" for fees.
Why don't people just keep their life in order and not have a strange urge to "borrow" money from the old and vulnerable, by the time you're 92 bank of mum and dad should be well closed down, refurbished as a charity shop and you give them things for free instead of the other way round (if the local high street is anything to go by).
K

 

[Beate]

Quite frankly, I think it's outrageous that he is even thinking of doing that. It's your Mum's money and needed for her care, plus as her attorney he cannot make any financial transactions in her name that benefit him directly. His property issues are his problem. Your Mum might be well off, but £250,000 is still a massive amount.

Can I ask whether you are set up as "jointly" or "jointly and severally"? In the first scenario he can't do anything without your permission.

 

[Pickles53]

It is not that unusual for anyone buying a house to be unable to complete the purchase until their existing house is sold. Most of us don't have access to these huge sums of money to ease the process. That's why you get a 'chain' of buyers and sellers where everything has to happen on the same day (exchange of contracts/completion of sale etc.)

So it's not obvious why your brother can't do the usual thing (or why he doesn't want to) and that in itself would make me very wary.

If you are running your mum's financial affairs as attorneys, then frankly you are accepting that she does not have capacity to make financial decisions so the fact she has apparently agreed to this loan is not really relevant. You must fulfil your responsibility as attorney and the simplest way to do this is to contact the OPG and explain the situation to them. I am pretty certain they would say no unless the loan is set up on a commercial basis etc with an appropriate rate of interest and repayment terms. You definitely need a solicitor to do this. Informal, non-documented money agreements between family members too often come to grief even where dementia is not part of the mix.

If you have the OPG's view, you have a good 'alibi' which will hopefully help you keep a good relationship with your brother. Effectively, you are not making the rules, you are just telling him the legal position which must be followed.

 

[MrsChristmas]

Money is the root of all evil...never a truer statement.

Hello there

Thank you for your help.

I omitted to tell you that I had offered (as a last resort) to loan my brother £100,000 as a commercial loan and that's when he said he would think about it. The idea was to protect mum from having to stump up £250,000 and I knew that I was safe in offering that amount to him as I knew he needed £250,000 otherwise it would not work for him.

However, my plan backfired today. My brother called me asking if I was still able to give the £100,000 and I said yes on the provision that it was a commercial loan and he said he didn't know what that was. He was going to give me interest on the loan at a building society rate (!). I then smelled a rat and said that I wasn't sure.

My brother explained that he'd spoken to the solicitor who had asked that mum go to her GP which mum agreed to do..(im really surprised she's always refused) next week with my brother. The DR presumably would ascertain mum's capacity.

In the conversation my brother told me that he still had asked mum for £100,000 and that she'd agreed. I was shocked as I thought he wasn't going to do that.

I told my brother that I needed time to think and his tone became irritable. He told that he might not need the money anyway but it was a house that he'd wanted for 5 years. I felt really bad but explained that I just couldn't afford to hand over all that I'd got and had nothing to live on. He then said that all the effort of getting mum to the GP, solicitors was wasted.

I then went to see mum she had no idea what I was talking about. She didn't know about the £250,000 or £100,000 that she'd agreed to. She didn't remember about going to her GP with my brother next week either. She either didn't know or couldn't remember.

After much conversation and I eventually wrote down everything on a card and gave it to her so that she'd remember. She said that she was going to speak to my brother this afternoon.

I have now received an email from my brother saying that he is not going ahead with the sale.

I must say, I'm disappointed, sad and disallusioned. This is the man who has complete control of my mother's finances. Not one mention of his wife's involvement in this, she has just sat back and let it happen, even though she would have benefitted too, if I hadn't blown the whistle.

 

[2jays]

Money and siblings, in my experience causes real issues. I'm sorry you are finding this out in your family

Not trying to be a doom monger but may I suggest that you keep a close eye on mums finances

Squishy hug xx

 

[jugglingmum]

Based on the OP's comments, it would appear that his chain has fallen down, and he wants to still ensure he doesn't lose the house he wants to buy.

There is a reference to a bridging loan, which presumably the brother might obtain from the bank otherwise. As this would be short term funding to bridge the gap between the purchase of his new house and the sale of his old house, the interest rate is often quite high. Picking up on Pickles comment, this is the usual thing to do if a chain breaks and you can obtain a bridging loan, rather than risk losing the house you are buying.

So it would appear he has asked his mum to help, instead of the bank, and it is envisaged as a short term loan only. This is a scenario I would expect to be quite common in affluent families that have this sort of money available.

He hasn't asked for help with his main mortgage and he has quite readily asked his sister to be involved and approve it and tried to involve his mum to see that she understands it.

As we all know capacity is a fluctuating thing, when my mum purchased her flat LPA hadn't been processed yet, so my solicitor did a basic capacity test with my mum so she understood she was buying a flat to live in. At this stage she was incapable of handling in full her day to day banking, but she did clearly understand what she was signing and why (to my utter surprise).

It would appear from the conversation that the mother has understood the loan request, and has asked the daughter/sister to approve to ensure all is above board. He has also referred to the solicitor drawing up the documents, and visiting mum to assess her capacity, so he is taking steps to ensure this is done above board.

I would envisage a loan document similar to a bridging loan offered by a bank, with a charge on the property, and a sensible interest rate (below the banks rate for a bridging loan but above what mum is being paid by the bank for the cash) and repayment due when the house is sold.

Picking up on Kevinl's point about ownership at the land registry - this is not correct if it is a loan, mum would not own it, but have lent money on it, secured via a charge, so the charge should be shown.

Mum taking part ownership of the house would trigger significant stamp duty land tax payments(SDLT), as this would be a second property for mum, and the additional 3% would be due, and the SDLT would be based on the property's full value so the loan route would seem far preferable.

In total I see this as a fairly routine transaction within a family that can afford it, if all had capacity, brother is safeguarding himself and mum by getting sister to sign and a fair interest rate means he isn't benefitting financially from being an LPA, and mum is also earning more interest than she otherwise would.

It may seem a very large sum of money to some, but my many would be in a position to do this (my mum did similar when I purchased my house over 20 years ago - when she had full capacity)

Edited to add:cross posted with OP's latest post, the fact that he wanted to borrow less from mum and some from you would indicate he was trying to borrow less from mum to keep it above board, these deals are very time pressured and I suspect he was getting pressure from the seller of the house to complete within a certain time. I had 6 weeks from offer to complete on this house or I would lose it.

You need to reestablish your trust with your brother and mum's finances.

 

[Dino]

With the nightmare I had to go through with my brother things can turn ugly very quickly where money is involved.

It was a different situation as he was abusive to mum, stole her money before Deputyship and tried to sell her house illegally and I had to hire an atty. to stop him.

Years before I would never dream he could ever behave that way.

Just wish siblings would all do the right thing.

Keep a close eye on your mother's finances.

 

[fortune]

Goodness this set all my alarm bells ringing. The position of the attorney is absolutely clear - you cannot benefit financially. There is an obvious question mark over your mother's capacity, especially relevant when dealing with such large sums. You've narrowly avoided being complicit in a potentially horrible mess. I'd be thankful your brother backed out of the sale and I'd also keep a very close eye on your mother's finances from now on. Should a similar situation arise I would recommend you take guidance from the Office of the Public Guardian before you agree to anything. Everything changes when a person starts to lose capacity.

 

[Selinacroft]

This all reminds me of a family I was helping when I did some professional care work. I looked after an elderly lady with 2 daughters, one quite wealthy a home owner and living in her own family home with grown up children, the other daughter poor as a church mouse living at home caring for mum. The none resident daughter wanted to sell her own home to downsize but leave her grown up family in her former home and so she borrowed off mum to buy her new smaller property while the children sorted themselves out meanwhile remaining in their mums house.
The elderly lady I cared for sadly passed away and there was a big feud going on between her 2 loving daughters, who made up on their mothers death bed . At the funeral service the caring daughter made a beautiful speach with her head held high and the none resident daughter was in floods of tears. I believe until this all happened in the last few weeks of her life they had all been a very happy close family. I hope they have remained so since the funeral.