Money causing problems

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nitram

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Apr 6, 2011
30,077
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Bury
I keep saying 'ask the OPG'
As attorneys you have to be very careful that you protect your mum's assets if she is not fully capable of doing it herself.
If a suitably qualified medic could certify that she had capacity to sell the house and help fund the annex at the time of the sale you would be in the clear, unless this person had known her for along time this seems impossible.
 

Phil2020

Registered User
Oct 11, 2020
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@Steve698 ... it's been quite an avalanche of contributions hasn't it! Bet it's been more than a little overwhelming!

You say "As for expert legal advice from a solicitor that has full knowledge of DoA and tax matters, where can I find a list of such solicitors ?"

It might be helpful to you and your sister to seek some guidance from The Law Society of England and Wales (assuming you're located in England or Wales). In the first instance have a look at its website - www.lawsociety.org.uk; Scotland and Northern Ireland have similar Law societies if you're in either of those locales. The societies should be able to point you in the direction of solicitors qualified in the areas of your interest. Good luck.
 

Female1952

Registered User
Apr 6, 2021
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Hi. Your head must be spinning!
My understanding is that:
- Your mother's house was sold and £x given to your sister to build an annexe to her house.
- The balance of £295,000 was to be shared between you and your sister, so that you each got £147,500.
- Your sister now wants £47,500 from you to cover the increased cost of the annexe and to pay her for caring for your mother.
- When this plan was agreed, you, your sister and the solicitor all agreed that your mother had capacity to make these choices. (You and your sister were not acting under the LPA.)

Am I right so far?

If so, does your mother still have capacity?
If she does, then your sister should be talking to her, not you.
If your mother no longer has capacity, then what she decided when she DID have capacity should be honoured.
In which case, you and your sister each get £147,500 and your sister gets £x for the annexe.
If your sister now wants some of your share, you are free to agree or not - she has no right to it.

After all, you don't have any obligation to fund your mother's care. And where is the guarantee that she would continue to care for your mother? She's had £x to fund the annexe but she could insist tomorrow that your mother needs to be in a care home.

If and when your mother needs professional care, deprivation of assets will be an issue and you and your sister will have to refund some or all of this money. Probably best, as you suggest, to leave it invested in your mother's name.

IHT is probably not an issue and, as someone has already said, this is not the forum for discussing it.

Conclusion: You and your sister (and your mother if she still has capacity) need to agree the facts and then explain them to a new solicitor and ask for advice.

Very best wishes.
 

Steve698

Registered User
Apr 30, 2012
29
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Hi. Your head must be spinning!

Absolutely, my head is spinning and I don't know where I am.

You don't have it entirely correct, it seems even within this thread lines have become crossed, lets see if I can uncross them without this post becoming like war and peace.

We had an LPA in place for about the last two years when Mum was deemed to have full capacity but we are not acting under that LPA.

Mum knew she needed help after a couple of falls and a couple of mini strokes, we (Mum, sister, myself) decided best option was to pool Mum's house and sisters house and Mum live with sister. Mum decided she would like any remaining balance from her house to be split between sister and I (early inheritance) I know it can't be seen as that but for now lets call it that. She signed paperwork to that effect in the presence of a solicitor.

The way houses are sold in this country it's unlikely two houses are going to find a buyer get the conveyance done and complete at the same time. So it turned out Mums was sold first and the whole of that sale was then used to purchase a house further out with enough space and room to convert a garage into an annexe, no mention of how this was to be paid for. That house is registered in my sister and her husbands name.

When sister then sold her house some 3 months later the agreement was to pay my half of (Inheritance) from that sale, which she did.

We now need to get the annexe built, which I have no problem contributing to, it's for our Mum.

My sister and husband say they got advice from a solicitor and accountant before any of this started and they did not see a problem. I have made my sister and husband aware of the Doa situation they say it won't be a problem as they will never ask LA for help. My concern is they can't possibly know that, they won't have the money to pay private and I want things tied up a little tighter than “we'll worry about that when it happens”.

I now don't know if the money I have in my account is legal (it came from the sale of sisters house not Mum's), if it's taxable if it's subject DoA rules etc because of that I don't feel comfortable touching a single penny of it.

I intend to see another solicitor shortly to get further advice but because I am asking these questions (I feel rightly) it is causing tension with sister and husband as they feel I am not trusting what they have done and how they are viewing the future. They feel I'm being over cautious, I disagree. Even down to future costs for Mum's needs (new bed, chest of drawers etc) who's paying ? If I mention it they get all defensive. I have made it clear to them I intend to see another solicitor and may need them to sign a document that they “gifted” the £147,500 to me from the sale of their house, I am yet to receive a response.

My chest is tight and my head hurts, I just want a quiet life without the threat of someone knocking on my door at some point in the future asking questions.
 

Steve698

Registered User
Apr 30, 2012
29
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If so, does your mother still have capacity?
As far as capacity goes she is not diagnosed with dementia or anything else but she is 88 and gets confused at times, you can not have a fully logical conversation with her as we are having here.
 

canary

Registered User
Feb 25, 2014
25,018
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South coast
Mums was sold first and the whole of that sale was then used to purchase a house further out with enough space and room to convert a garage into an annexe, no mention of how this was to be paid for. That house is registered in my sister and her husbands name.

When sister then sold her house some 3 months later the agreement was to pay my half of (Inheritance) from that sale, which she did.

OMG Its even more complicated than I thought ???
 

jaymor

Registered User
Jul 14, 2006
15,604
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South Staffordshire
Inheritance refers to the assets that an individual bequeaths to their loved ones after they pass away. An inheritance may contain cash, investments such as stocks or bonds, and other assets such as jewelry, automobiles, art, antiques, and real estate.

so your sister bought a house with your mothers money and put it in her own name? Then sells it and gives the money that was not hers to give, to you.

I have to agree with @canary, ????
 

Melles Belles

Registered User
Jul 4, 2017
1,213
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South east
I think @jaymor the sister firstly sold their mothers house and used the money to buy a house in her and her husband’s name and then sold her and her husband’s house and then gave half the money from the 2nd sale to @Steve698
So their mother now has no assets
 

Steve698

Registered User
Apr 30, 2012
29
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so your sister bought a house with your mothers money and put it in her own name? Then sells it and gives the money that was not hers to give, to you.
NO not correct either. Sold Mums, bought a house in her and husbands name with money with Mum's permission, then sold her own house bought and paid (no mortgage) and paid me from that sale.
 

Steve698

Registered User
Apr 30, 2012
29
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I think @jaymor the sister firstly sold their mothers house and used the money to buy a house in her and her husband’s name and then sold her and her husband’s house and then gave half the money from the 2nd sale to @Steve698
So their mother now has no assets
This is correct but after giving witnessed permission in front of solicitor.
 

nitram

Registered User
Apr 6, 2011
30,077
0
Bury
I now don't know if the money I have in my account is legal (it came from the sale of sisters house not Mum's), if it's taxable if it's subject DoA rules etc because of that I don't feel comfortable touching a single penny of it.
It's legal, sister sold her house and gifted you some of the proceeds.
Nothing to do with DoA as money never belonged to mum.
If your sister dies within 7 years you may have to pay IHT

There’s normally no Inheritance Tax to pay if either:

  • the value of your estate is below the £325,000 threshold
  • you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club
The % you would have to pay tapers off during the 7 years
Years between gift and death
Rate of tax on the gift
3 to 4 years 32%
4 to 5 years 24%
5 to 6 years 16%
6 to 7 years 8%

7 or more 0%
https://www.gov.uk/inheritance-tax ,

If mum had full capacity during all of the events there is no problem with the OPG, everything was her decision and the OPG will not be interested unless somebody challenges this capacity.

That would only leave the potential DoA problem which will only arise if she requires care in the future and a financial assessment is made, this assessment can be avoided if she self funds from whatever source, would you be prepared to chip in?

If an assessment was made with your mum living in an annex with little or no capital the LA will probably ask questions and start digging.

I hope your sister is not underestimating the stress of caring for a PWD as the dementia progresses.
 

Steve698

Registered User
Apr 30, 2012
29
0
so your sister bought a house with your mothers money and put it in her own name? Then sells it and gives the money that was not hers to give, to you.
You are making it sound as if she/we have purposely stole her money and thrown her onto the street.
We honestly are trying to do the best for Mum, she can't look after herself we are trying to do that for her. She is being cared for, cooked for kept safe and warm. As far as her now liquid assets go they can spent entirely on Mum at least from my side as far as I'm concerned but her wishes were for sister and I to share it while she is still around to see it.
 
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Steve698

Registered User
Apr 30, 2012
29
0
I hope your sister is not underestimating the stress of caring for a PWD as the dementia progresses.
I have discussed it with her, she says is fine we have dealt with it with my father but it does concern me.
 

MartinWL

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Jun 12, 2020
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London
The big problem may be that your sister has made a promise to look after mum that is frankly nieve and foolish. Nobody can commit to permanently caring. If she needs expensive care in the future she has been left without funds.

Could you find things for your sister to read, about caring for a PWD?

I do not think you can say that even though you are her attorney you were not acting as such. I suspect your duty as attorney begins before bthe ink is dry on the POA document.

I suggest putting all the cash from the house sales up to the sale price net of costs of her own house, into a savings account in your mother's name. From both you and sister.
 

nitram

Registered User
Apr 6, 2011
30,077
0
Bury
How is the 'early inheritance' of £295K, divided equally between you and your sister, calculated?
Two houses have been sold, one bought and expenses incurred.
Is it all that is left in the bank from the sale of your mum's house or has some been allocated for the proposed annex?
 

nitram

Registered User
Apr 6, 2011
30,077
0
Bury
Yes absolutely
If opting for no assessment and you and sister chipped in equally it could be a large sum for each of you, let's guess £500/wk at present, although members living in some areas will say this is far too low.
Care home fees are rising every year, a large rise can be expected soon because of the extra costs during covid and pressure to increase staff pay rates,
 
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