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Receivership / Inheritance

Discussion in 'Legal and financial issues' started by chappers, Sep 11, 2007.

  1. chappers

    chappers Registered User

    Sep 10, 2007
    12
    I am in the process of applying to become a receiver for my father in law.

    The application will be going off this week hopefully.

    My father in law has just received a large sum of inheritance money. We have received the cheque.

    My question is this. Acting in the best interests of my father in law, this money should be placed asap into an account so that it can earning interest for him. Is there anything i can do to speed the process up, so that this can be done ?
     
  2. sue38

    sue38 Registered User

    Mar 6, 2007
    10,856
    Wigan, Lancs
    Did Solicitors deal with the estate? Could you ask them to hold on to the funds until you are ready to put it in to an account. Ask them if they could place it in a designated deposit account which should mean that all the interest is credited to your father.

    If they have finished administering the estate and want to close the file they may be reluctant, but worth a try.
     
  3. chappers

    chappers Registered User

    Sep 10, 2007
    12
    Thats the problem, the estate has now been administered, and the cheque issued to my father in law. It has earnt interest since the money was made available up to the present day (that has been added on), but now it will not be gaining any interest. Is there anything that can be done ? Or do i just wait until the receivership account is set up, which could be quite some time.
     
  4. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,419
    Does he not have any existing interest bearing accounts? Without the recievership, it wouldn't be accessible, but I don't see that would stop a cheque being paid in. Alternatively, assuming he has a bank account, depending on the bank, they might (and I stress the might) be able to set up some form of savings account: it wouldn't probably pay much interest but it would be something.
     
  5. chappers

    chappers Registered User

    Sep 10, 2007
    12
    He just has the existing joint current account that was set up with his wife.
     
  6. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,419
    Ah, I see. It looks as if you'll just have to pay the cheque into his current account then (I assume his wife is deceased). What I wouldn't do is "sit" on the cheque: I don't know how long cheques remain valid in the UK.
     
  7. chappers

    chappers Registered User

    Sep 10, 2007
    12
    His wife is still alive (my mother in law).

    The family have asked me to be the receiver.

    Is it sensible to just put the money into the joint account initially, and then when the receiver account is set up, move it ??
     
  8. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,419
    Umm. The fact that he has a living spuse might make a difference. Is there any reason to suppose that his wife would play "fast and loose" with the money? Because once it's in that account she will be able to access it. In fact, as a joint account holder I don't see any reason why she couldn't ask the bank to set up a joint savings account and move the money there: opening a savings account with a financial institution that you already have a relationship with is a much easier proposition than opening a brand new account. However, I have to say this: I do not know whether this inheritance would be considered jointly owned savings. I assume it would be so paying it in to the joint account would have no effect. Obviously when the recievership is in place, you'll want to separate his and her assets: once you start paying for care homes etc it makes much more financial sense to separate the funds to start with, then your FIL is just spending down HIS savings rather than THEIRS, and will reach the threshold at which the LA will start to contribute much faster. In fact, thinking about it, it would seem to be a bad idea from this point of view to pay this cheque into an account which was in his sole name. You would need professional advice, but it might mean that it would then end up in his pot rather than the joint pot. Since I believe that she has a legal claim to half of this inheritance as his wife (although you should check that) it would seem reasonable to comingle their funds (as I assume they have been doing). If, on the other hand they have kept their financial affairs completely separate, now might not be the time to start mixing them, Mind you, my understanding is that if this is a long established marriage, essentially their assets are their assets even if kept in separate accounts.
     
  9. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,419
    Wait! Wait!

    I was just wading through the age concern factsheets regarding LA charging procedures. In there they give an example of someone who has a joint account plus a savings account in their sole name. In that example all of the savings account was considered to be their sole asset (plus half the joint account). If that is really true, then you're going to have to be really careful. To my mind, this inheritance should be a shared asset BUT it is entirely possible that it might not be considered one from the point of view of the LA: they seem to have a different view of what constitutes a shared asset than most of us would. You absolutely need advice from someone that specialises in this field, both to ensure that your FIL's wife get's her fair share and that you are safe guarded from charges of disposing of assets inappropriately.

    This goes beyond the issue of setting up an interest bearing account to accept this cheque, and into what consistutes a shared asset from the POV of the LA and only someone who has specialised in this area can tell you that.
     
  10. Margaret W

    Margaret W Registered User

    Apr 28, 2007
    3,725
    North Derbyshire
    Inheritance

    It doesn't seem right that you are losing out on a decent rate of interest. What has your/dad's bank said? I don't know the rules of banking, but could they place it into a high interest account in dad's name, but not allow any withdrawals until the receivership documentation is finalised? Or place it into an account with you as an "appointee", a term the DWP use (see next thread!). I don't understand some people's statement that it could be considered joint monies. Of course, the name on the cheque doesn't signify ownership of the monies, but if you have evidence that it is dad's alone, then it is. There is no law that says an inheritance left to one party of a marriage is to be shared. The will will determine who owns it.

    I think an earlier person who suggested the solicitor could bank it on behalf of your dad might be right. They may still regard your dad as their client, even though they have completed that bit of the deal. Solicitors are able (indeed sometimes are obliged) to pay amounts belonging to clients into Designated Deposit Accounts (DDAs), and I don't believe it matters whether the cheque is in their name or your dad's. Any solicitor worth their salt will do what they can, cos they will get your business in the future, and it costs them little to invest this on your dad's behalf.

    Let us know how you get on, it is worth learning about.

    Love

    Margaret
     
  11. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,419
    I think you have a very valid point Margaret: the money is chappers FIL. However, what would he (FIL) have done if he had received this inheritance before being incapacitated? Paid it into his current account, I guess, which is in joint names.
     
  12. chappers

    chappers Registered User

    Sep 10, 2007
    12
    My FIL has only one account, the joint account that he has shared with his wife.

    He has this inheritance, which was left to him.

    Maybe i should take legal advice on this.

    Its a tricky one for many reasons. I am applying to be his receiver, and therefore I must act in my FIL's best interests. I also though want my mother in law, to be ok financially. Afterall, when my FIL was ok and not ill, all the money went into their joint account. Now, when the receivership is set up i will be setting up a new account for my FIL's money to put into, so my MIL will see a difference to the joint account.

    Its an interesting point though with regards to the inheritance, is my MIL entitled to any of it ? I assumed that all of the money belongs to my FIL.

    As said above should i take legal advice on this ?
     
  13. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,419
    #13 jenniferpa, Sep 12, 2007
    Last edited: Sep 12, 2007
    I really think you should. Apart from anything else, I see little point in putting more money into the pot that will be assessed for care, yet you obviously want to do the right thing. It's a bit like the difference between tax evasion and tax avoidance: the former is illegal but the latter is prudent. Make sure, though, that if you want advice on this specific issue (i.e. the LA's view of what constitute's shared assets) you consult a solicitor who has expertise in this field.

    Having had another look at the information I have about LA handling of shared assets on the face of it, if something's in a shared account it's considered a shared asset. However, that seems overly simplistic: I find it hard to believe that simply placing money in a shared account makes it "shared", yet I can find no indication that the LA would look back at the source of this money.
     
  14. Pirate

    Pirate Registered User

    Jun 24, 2007
    7
    England
    Perhaps you could discuss this with the Court Of Protection.

    Maybe it'd be possible for them to issue an interim Court Order to allow you to open a new high interest account?
     
  15. Helena

    Helena Registered User

    May 24, 2006
    715
    Firstly the cheque is valid for 6 months in the UK

    I would put the cheque in the joint account fast and then move suitable amounts into an account in his wifes own name

    She will in all likelihood have a very hard time indeed coping with living if they rip away his pension and half of everything they have

    Anyone with AD is entitled to continuing care and its criminal to rob them of their savings

    If only everyone fought this illegal charging for care the Government would have to rethink

    see www.************
     
  16. chappers

    chappers Registered User

    Sep 10, 2007
    12
    But what about "depravation of capital", would it be classed as this, if the cheque was deposited into the joint account ?
     
  17. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,419
    Only if you couldn't get the money back if it was determined that it was all his, and supposed to all be in his care "pot". There's nothing at all that states where the money has to be held, just that it needs to be available (within reason) and still within the donor's control. The problems you have, as I see it, is 1) it could take longer than 6 months to set up that receivership so the cheque may well expire if you "sit" on it (although that shouldn't be a problem: they should be able to draw up a new one) and 2) if you pay it into the joint account, will the money still be there 6 months down the road (possibly) when the recievership is finalised. Assuming you're absolutely certain that 2) is true, I would, personally, be more than a little inclined to pay it into the joint account, assuming that it would be considered by the LA to be his wholly owned asset, but hoping the fact that it was in a joint account would actually mean that it was split when the time came (assuming you want that to happen). As previously noted, that (paying it into the joint account) is exactly what he would have done if this situation had come up before he became ill. However, as I've also noted, that also depends on your MIL playing ball when the times comes, and people can be odd when it comes to money, I'm afraid.
     
  18. chappers

    chappers Registered User

    Sep 10, 2007
    12
    Spoke to a solicitor today.

    Advised to wait if possible, until the receivership account has been set up, then pay in. Although if i pay into joint account, wouldnt be an issue provided it remains there.

    The money is FIL's. If when he gets re-assessed (with regards to care home contributions) the LA take into account the new money, then I could challenge them, making the argument that that is what he would have wanted/done etc etc. The LA could back down, but if they did not, then there is nothing i could do about it, and would not be able to challenge it further.

    I still say its wrong. My FIL would have paid it into the joint account if he was well, then money would have been shared between him and his wife. And as i have said before, if this had happened prior to him becoming ill, the money gets put into the joint account, then he gets ill. Half of it, would have been disregarded by the LA, so it just seems a little unfair on my MIL.

    Surely acting in my FIL's best interests as a receiver, includes looking after his wife too!!!!
     
  19. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,419
    Chappers: what stage is your FIL? I mean how close is the putative move to a nursing home? Because depending on the size of the legacy and other savings, it could be some time before you even need to notify social services: I never did. I realise you're also concerned with the court of protection, but over this specific issue, I think it is more than reasonable that you do what your FIL would have done.
     
  20. chappers

    chappers Registered User

    Sep 10, 2007
    12
    FIL is already in a home, and has been assessed (financially) with regards to making contribution. At the moment he does have to contribute, but nowhere near the full amount (the assessment was based on figures prior to the inheritance).

    Should the inheritance come in to the equation (ie. all of it), it would take him over the threshold, and he would then be required to contribute 100% of his residential care costs. :(
     

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