separating joint accounts

Discussion in 'ARCHIVE FORUM: Support discussions' started by sheila d, Dec 12, 2007.

  1. sheila d

    sheila d Registered User

    Dec 8, 2007
    25
    liverpool
    #1 sheila d, Dec 12, 2007
    Last edited: Dec 12, 2007
    Mum is currently in hospital and will be moved to a rehabilitation home soon. At the moment it looks like she will have to go to a care home afterwards as Dad can't cope with her mental health.

    Their savings are all in joint names and are above the upper capital limit. In these circumstances Age Concern factsheet says " where a couple have joint assets and one enters a care home, it may be beneficial to divide any joint capital before fees are incurred. Dividing the joint account at the outset saves the couple having to spend more capital than is necessary before the resident's assessed share falls below the upper capital limit "


    Good advice, but does anyone know how we do this in practice? Does Dad just take out 50% and open his own account, thus leaving Mum's share in a joint account. Or does he have to then remove his name from the joint account, which means he can't operate on Mum's behalf?

    Any tips on how we proceed or any other advice on how you have reduced the amount of contribution
    ( legally ) would be much appreciated.
     
  2. sue38

    sue38 Registered User

    Mar 6, 2007
    10,854
    Wigan, Lancs
    Hi Sheila,

    If it were me I would certainly get your Dad to take out his 50% share and put it in to an account in his sole name. To take his name off the joint account you may need your Mum's signature, which may or may not be possible. It may be worth leaving the account in joint names so that your Dad can access the money if he needs to on your Mum's behalf.
     
  3. CraigC

    CraigC Registered User

    Mar 21, 2003
    6,630
    London
    Hi Sheila,

    Sorry to answer a question with a question does anyone have an Enduring Power of Attorney? This may help you deal with the situation of the joint account, that's all.

    I too would recommend withdrawing 50% and keeping a note of the transaction. In my experience, with or without EPA modifying a joint account without both signatures is very difficult, this goes for direct debits/standing orders etc. It would be easier to open a new account in your dads name and transfer 50% to that account.

    I'd also consider some financial advice specific for their circumstance. There is a lot to consider if money is tied up in property etc. You may be able to get some help from the help the aged helpline , CAB or the alzhiemers helpline if like me you find financial advisors a little overbearing (and overpriced).

    Hope that helps
    Craig
     
  4. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,438
    I would agree with everyone else - if there is no EPA in place this is the easiest way to manage the situation.

    As to minimizing fees - I think of this akin to tax avoidance not tax evasion - the former being prudent, while the latter is illegal! Make sure that if your father pays for anything that is exclusively for your mother, it comes out of your mother's money, and that anything that he pays for that could be rightly shared is in fact shared. For the latter I'm thinking about gifts to family, maintenance bills for the family home etc. Just because she's not living there, she has a legitimate stake in ensuring it is properly maintained, and it is fiscally responsible for the person who is taking financial decsion for her to maintain the value of such things. Note I'm not advocating major projects, but maintenance yes. I think it's open to interpretation whether bills can be shared out (i.e electricity etc). I suspect with your mother living elsewhere these will reduce, but not by 50%. Now this is very much my personal opinion, but I think a compelling case could be made for paying the amount that is above 50% of the former bill out of your mother's share, but it's fair to say that I've not been in that position, so it's speculation. I.e If before a bill was £200, and now is £150, then your father would pay £100 and your mother £50.
     
  5. sheila d

    sheila d Registered User

    Dec 8, 2007
    25
    liverpool
    gifts to family

    At the moment, my son ( their grandson) receives help with his university costs. Can this arrangement continue, if they split it 50/50 ?

    Also they had already planned to give my other son £3000 to help him with his gap year costs - he goes in January. Again can this payment still be made ? I can't seem to find anything that links the tax viwpoint of being able to make gifts of up to £3000per person per year and how this would be construed by financial assessment rules ? Anybody know?
     
  6. Skye

    Skye Registered User

    Aug 29, 2006
    17,000
    SW Scotland
    Sheila, I'm in he same position as your dad. My husband has recently gone into a NH, everything is in joint names, and we're over the limit.

    I think the crucial question is, are the funds likely to reduce to the £21,500 limit?

    If not, there really isn't a problem. I simply did not declare any financial details, and agreed to pay the fees. I just continue as normal.

    If your dad is likely to get below the limit, you have to declare, otherwise there are problems when the time comes to start claiming.

    But I was advised that if I did declare, just to declare half of all joint bank accounts and investments, and to keep accounts and receipts for anything spent on John's behalf. It was OK to keep the joint accounts.
     
  7. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,438
    I think you have to balance what they could reasonably afford before, and what they can reasonably afford now. The problem is - you're not going to find firm guidelines on this. The general feeling is that gifts that are in line with what have previously been given, and which are reasonable for a person with that income to give are OK. Also gifts on life changing events (marriage). But I do think it's important to recognise that being diagnosed with dementia, however unfair or unexpected is in itself life changing. It may NOT be possible to continue spending money in the same way. Disabilities mean you incur more expenses and so hard choices may have to be made. If a gift falls into the "valid" category though - yes they should each contribute 50%. Be prepared to support your position down the line though.
     
  8. CraigC

    CraigC Registered User

    Mar 21, 2003
    6,630
    London
    #8 CraigC, Dec 12, 2007
    Last edited: Dec 12, 2007
    I've never found any clarity on this issue, but my thoughts have always been the same. It is the intent that is important. If you transfer money with the intent of avoiding paying care home fees and immediately need financial help, then any social services/local authority assesment that follows will highlight issues.

    If you are assessed within a certain period of moving or using finances (I honestly have never found out what this period is) there still may be an issue.

    I also think those gift figures of £3000 a person/family apply to Inheritance Tax not fee avoidance. Apologies if I'm wrong but that is my impression.

    I also agree with Hazel about keeping records.

    Just to add. I'm sure the last assesment form that I saw said they need 6 or 4 years of financial records? Again, please correct me if I'm wrong.
     

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