Money Advice

[tigerlady]

Thats really helpful, thank you Tigerlady. It seems a financial advisor will be the best place to start. When you say she could, if she wished, give gifts to me .......', do you mean while she was alive and did ou have PoA? Thanks again.

My sister had POA and we didn't take any gifts, - my sister gave me my traveling expenses for my visits, as I lived 100 miles from my mother's care home. My sister also gave my brothers children money for birthdays and Christmas. However, my brother wanted some money for an extension to his house, and my mother wanted to give it to him. My sister and I agreed he should have it, as all 3 of us were the only beneficiaries of the will. When my mother died we reduced his share by the amount he had in advance.

My sister was a legal secretary, and also very good with figures, and as we'd taken the insurance out to pay mum's care home fees after 3 years, we knew that my mother would be able to pay the care home fees for the rest of her life without touching the remaining capital. I don't want to give figures here, and they wouldn't be relevant today with the very low interest rates and higher care home fees, but if I still have them, I could pm you so you got some idea how it worked.

 

[Tubbsy]

My sister had POA and we didn't take any gifts, - my sister gave me my traveling expenses for my visits, as I lived 100 miles from my mother's care home. My sister also gave my brothers children money for birthdays and Christmas. However, my brother wanted some money for an extension to his house, and my mother wanted to give it to him. My sister and I agreed he should have it, as all 3 of us were the only beneficiaries of the will. When my mother died we reduced his share by the amount he had in advance.

My sister was a legal secretary, and also very good with figures, and as we'd taken the insurance out to pay mum's care home fees after 3 years, we knew that my mother would be able to pay the care home fees for the rest of her life without touching the remaining capital. I don't want to give figures here, and they wouldn't be relevant today with the very low interest rates and higher care home fees, but if I still have them, I could pm you so you got some idea how it worked.

That's very interesting tigerlady, thank you. I must look into insurance to pay her fees. I have looked at both the opg & C of P websites about gifting which are very helpful & I'm pretty sure, as we are talking about such a tiny percentage of her assets, it won't be too much of a problem. I'd be interested to know more about what you did so feel free to pm me. Thank you very much indeed. ☺

 

[canary]

I looked into having insurance tubbsy and I would suggest that you check the small print of the policy before you sign it to see whether the payout will increase as her fees increase, or whether they will stay at a set figure.

 

[Tubbsy]

I looked into having insurance tubbsy and I would suggest that you check the small print of the policy before you sign it to see whether the payout will increase as her fees increase, or whether they will stay at a set figure.

Thanks canary, I will. I will have to contact a specialist FA so hopefully they will advise me well!

 

[Tubbsy]

That's very interesting tigerlady, thank you. I must look into insurance to pay her fees. I have looked at both the opg & C of P websites about gifting which are very helpful & I'm pretty sure, as we are talking about such a tiny percentage of her assets, it won't be too much of a problem. I'd be interested to know more about what you did so feel free to pm me. Thank you very much indeed. ☺[/

 

[Tubbsy]

My sister had POA and we didn't take any gifts, - my sister gave me my traveling expenses for my visits, as I lived 100 miles from my mother's care home. My sister also gave my brothers children money for birthdays and Christmas. However, my brother wanted some money for an extension to his house, and my mother wanted to give it to him. My sister and I agreed he should have it, as all 3 of us were the only beneficiaries of the will. When my mother died we reduced his share by the amount he had in advance.

My sister was a legal secretary, and also very good with figures, and as we'd taken the insurance out to pay mum's care home fees after 3 years, we knew that my mother would be able to pay the care home fees for the rest of her life without touching the remaining capital. I don't want to give figures here, and they wouldn't be relevant today with the very low interest rates and higher care home fees, but if I still have them, I could pm you so you got some idea how it worked.

Just one other thing, if you don't mind me asking, did your sister have to go via the Court of Protection to be able to give your brother the money?

 

[tigerlady]

I looked into having insurance tubbsy and I would suggest that you check the small print of the policy before you sign it to see whether the payout will increase as her fees increase, or whether they will stay at a set figure.

I agree - you must read the small print. Our deal was that the payout went up by a certain percentage a year - haven't found the paperwork yet and I am away for 10 days from tomorrow, so don't have time to look now - cant remember if it was a fixed percentage or a percentage related to inflation.

The important thing to remember is that any insurance or annuity you take out for this means that you effectively lose that amount of capital. If your mum dies soon after you take it out, then it feels like you have wasted the money but if she lives for many years, it will be worth it - but with dementia its impossible to say how long someone can live with it.

 

[tigerlady]

Just one other thing, if you don't mind me asking, did your sister have to go via the Court of Protection to be able to give your brother the money?

No - maybe she should have done - I don't know - but she had POA and my mother was self funding with enough capital to last for many years, even if we hadn't taken out the deferred annuity.

Also it was the old EPA so I don't know if that makes a difference

 

[canary]

I agree - you must read the small print. Our deal was that the payout went up by a certain percentage a year - haven't found the paperwork yet and I am away for 10 days from tomorrow, so don't have time to look now - cant remember if it was a fixed percentage or a percentage related to inflation.

The important thing to remember is that any insurance or annuity you take out for this means that you effectively lose that amount of capital. If your mum dies soon after you take it out, then it feels like you have wasted the money but if she lives for many years, it will be worth it - but with dementia its impossible to say how long someone can live with it.

Also remember that the fees may go up faster than the policy allows for. Mums annual review has gone up a lot due to implementation of the minimum wage and the fact she now requires considerably more care.

 

[Tubbsy]

No - maybe she should have done - I don't know - but she had POA and my mother was self funding with enough capital to last for many years, even if we hadn't taken out the deferred annuity.

Also it was the old EPA so I don't know if that makes a difference

Thanks for your reply tigerlady; I did phone the OPF the other day who said they were sure it would be fine for my brother and I to have the amount of money we're talking about as its such a small percentage of my mums assets, but they said I should probably contact the Court of Protection to make sure, which I have and am waiting to hear adk from them. I really appreciate all your advice!

 

[Tubbsy]

Also remember that the fees may go up faster than the policy allows for. Mums annual review has gone up a lot due to implementation of the minimum wage and the fact she now requires considerably more care.

Thanks Canary, yes, you're right. I might speak to the care one about the likely increase in fees, thanks again

 

[lemonjuice]

Thanks Canary, yes, you're right. I might speak to the care one about the likely increase in fees, thanks again

Just bear in mind that the Nursing Home may not be upfront about increases. When I'd originally approached the Home I said my mother would be self-funding on the assumption that the annual increase would be no more than 5%. Well that went out the window the first year. then bigger increases. They have you over a barrel the longer your relative is there as they know you won't want to disturb them and move them.

 

[Tubbsy]

Me again!

Following on from this, I have all the forms to apply to the Court of Protection for my brother and I to ask for some money from the sale of my mums' house. In the meantime though, I was wondering if it would be ok to borrow £1000 from her current account (she has an income of nearly that per month) as well as a huge amont in a savings account? My daughter needs braces and they're going to cost over £2000 and I know my mum would have given me the money instantly in the past....she paid for things like my childrn's school trips abroad, gave my brother over £10k and lent me money to buy a car. Do yo think this would be acceptable to the opg/court of protection?

 

[Katrine]

I think not. The only possible way this would look acceptable would be to write her a letter for her records stating that you have borrowed £1K and will pay it back over a period of x months with an additional sum of e.g. £50, or whatever would be the equivalent of having had that money invested, so that she doesn't lose out financially by making the loan. I think this is called a promissory note. When in doubt, check with the OPG. Frankly, with bank interest rates currently so low, this wouldn't be the most cost effective way of borrowing anyway.

I think you should get the money from somewhere else and not compromise your suitability to be an attorney/deputy in any way. It's a slippery slope. You cannot risk blurring the edges of a clear dividing line between your mum's interests and yours.

 

[Beate]

I would not do this. You cannot use your mother's money as a loan now or in the future as it's for her care, and you should not profit from her assets as a deputy. It doesn't matter whether you claim she would give it to you, you have to use it in her best interest and not in yours.

 

[Tubbsy]

I think not. The only possible way this would look acceptable would be to write her a letter for her records stating that you have borrowed £1K and will pay it back over a period of x months with an additional sum of e.g. £50, or whatever would be the equivalent of having had that money invested, so that she doesn't lose out financially by making the loan. I think this is called a promissory note. When in doubt, check with the OPG. Frankly, with bank interest rates currently so low, this wouldn't be the most cost effective way of borrowing anyway.

I think you should get the money from somewhere else and not compromise your suitability to be an attorney/deputy in any way. It's a slippery slope. You cannot risk blurring the edges of a clear dividing line between your mum's interests and yours.

Hi Katrine, thank you for your reply. I nas thought about doing what you mention about writing a letter and paying her back. The money isn't being invested, it's just mounting up in her current account; it's the other money that's in a savings account and the house sale money will be invested. Do you really think borrowing such a small amount would be a big problem, especially when I can prove she's given my brother and I much larger sums in the past? Thank you.

 

[LYN T]

I also think this is a no go area. Phone the OPG-they are very helpful. You are already asking for permission to benefit from money from the sale of your Mum's home. I hope this doesn't flag up a potential problem. Are you aware that when someone is appointed a Deputy annual accounts will have to be shown regarding all expenditure-backed up with receipts/invoices etc- and latest bank/savings accounts statements.The statements can be requested for previous years. I'm sure others who have been deputies will come along soon with expert advice.

 

[Tubbsy]

I also think this is a no go area. Phone the OPG-they are very helpful. You are already asking for permission to benefit from money from the sale of your Mum's home. I hope this doesn't flag up a potential problem. Are you aware that when someone is appointed a Deputy annual accounts will have to be shown regarding all expenditure-backed up with receipts/invoices etc- and latest bank/savings accounts statements.The statements can be requested for previous years. I'm sure others who have been deputies will come along soon with expert advice.

Hi. Yes, I'm aware I will need to show where any money has been spent, but none has been other than care home fees from the savings account and fees to do with selling the house. I haven't yet submitted the forms to ask for any money and £1000 is such a small amount in the scheme of things and money she would want to give for her grand-daughter to have the dental treatment she needs. I very much get the feeling that some of the people on here disapprove of me asking about this subject because my mother has a lot of money but I wouldn't do anything that's not legal.

 

[Shedrech]

I'm interested in this issue Tubbsy
as it's caused a major rift in my family
I read the instructions to Attorneys that everything must be done in the best interests of the donor and that the Attorney and any of the Attorney's family members are not to benefit from being an Attorney as meaning that loans etc are not acceptable, neither are large gifts
to be honest, I don't think my dad's money should be used for anyone but him
he too has a pretty substantial amount - his pension covers his care home fees at present (though with a 10% increase per year that will not always be the case) so his savings will pretty much sit there until he dies - I don't feel as Attorney I should have any access to his money before he dies whatever he may or may not have said and done in the past
I have a co Attorney who says 'dad would have wanted to ...' and 'that's what family does' - but I disagree - so where does that leave us? - it's no longer possible to know what dad's wishes might be, so to me nothing should be done as that's the conservative approach - we're both adults and responsible each for our own finances
I checked with the OPG that if someone lives in dad's house now he is no longer there (trying to sell it currently) they should pay the bills, not dad - co Attorney said dad would want a family member living there and, as the person would be 'caretaking' in case of vandalism, dad should pay (and the person wasn't being asked to contribute while they lived at home, so why should they if they were staying in dad's house)
and also checked when it was suggested that the person and partner rent the house until dad dies but at a low rent (the same as being paid for a flat by the partner) which would give dad 'a bit of an income' and more interest than from savings (though they wanted to put in a new kitchen and have a builder in to sort out some damp issues) - the OPG said any rent would have to be a fair market rent and as family were involved there was a conflict of interest and permission would have to be gained for the COP
so I'm a bit surprised that the OPG have said on the phone that taking the amounts you are asking about would be acceptable (eg 2% of £200,000 would be £4000 in total - which to me is a large amount if not a large percentage)
I don't think anyone is 'getting at' you personally, it's just that the roles of Attorney and Deputy seem to have such tight controls on them, alongside the issue of deprivation of assets, that many think there is very little leeway with how a donor's finances can be dealt with - so much so that some Attorneys/carers go the other way and pay far too much from their own pockets or are afraid to take reasonable expenses
I also read some of the cases on the OPG website and Attorneys have been removed for infringements involving what might seem to be quite small sums - yet also read on TP of what are considered/appear as abuses of the POAs involving large sums, which are not taken up by police or the COP
so, as I said at first, I'll be interested in the outcome of your 2 enquiries to gauge what is/is not acceptable to the OPG - bearing in mind each case is individual
so I hope you'll let us know

 

[2jays]

I don't think it's disapproval about you having the money, I think the advice is to protect you from possible problems in the future with the Opg/social services/deprevation of assets people.

That said, you have suggested that your mum is "wealthy" so that £1000 is small change to her. I can only speak from personal experience, and I have lasting power of attorney, not guardianship so the rules may be different but when I spoke to opg about a "loan" for my sister, it was suggested to me, if I could prove that this was what mum would have done in the past, and that giving a "loan" to my sister wouldn't place mum in financial difficulties, then they didn't see a reason why I shouldn't.

At the time mum had enough money for over 5 years care home fees, taking into account the percentage rises. That was 4 years ago, and it seems like mum has at least another 4 years of living to do as she appears physically very well. At the time of the loan, it was agreed in writing that if mum run out of money, my sister would repay the loan