How to manage mums funds
Comments
-
The rules of Power of Attorney require that the attorney must always act in the best interests of the donor. Minimising IHT and maximising inheritance are not valid reasons for making an investment decision under PoA. An annuity could well be in the interests of the donor if there was any doubt as to whether the capital would last out. It could of course incidentally help the eventual beneficiaries by limiting the risk that all the money would be used up.
I asked about the health and age of the Mum to try to see if an annuity is appropriate. I mentioned the cost of the annuity as it would be naive to imagine that this does not cross the mind of a child with PoA. If the Mum is 70 and in reasonable health then an annuity might be appropriate..........85 and in failing health then not so much.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
Thanks for all your helpful comments. I shall certainly be taking professional advice - thanks for the links - but you’ve raised a few things I’d not thought of - annuity for one. As Mum is mid 80s and being treated for a number of nasties it may not be the best option but I’ll check out what might be out there . She has attendance allowance and some kind of nhs contribution coming in and IHT shouldn’t be an issue as dads allowance carries forward.
One sibling is keen on us putting a bit in premium bonds. Any views?!
Bit of a difference of opinion on here about cash.I have borrowed from my future self
The banks are not our friends0 -
Bit of a difference of opinion on here about cash.
Differing opinions are always good for thinking options through!
Malthusian's point about all cash being inappropriate was, I think, primarily related to the possibility of your Mum being not yet very elderly with significant longevity still. In which case longer term investments might make sense.
Your new info that she's mid-80s with problems would still suggest to me that a primarily cash option would be sensible.
Whatever you do do take proper advice
As for Premium Bonds, you'll find varyig opinions on those too. My own view is that the NS&I savings accounts are a better option as you know what you'll get. With PBs you don't - it could be a windfall or it could be nothing. The average returns you see quoted are just that, average. You may not get anything like that. But at least you preserve the capital.0 -
As your mum is in her mid-80s I wouldn't think to invest in stocks and shares would be in her best interests. I would think NS&I and/or savings accounts which have the best interest rates, not putting more than the FSCS limit (which I think is £85k) in any one bank. I wouldn't think Premium Bonds are in her best interests. However I agree it may be best to get professional advice from an IFA.0
-
Your new info that she's mid-80s with problems would still suggest to me that a primarily cash option would be sensible.
A relative has PoA for his relative who went into care (at the age of 91 )with heart failure, hypertension, severe arthritis, severe fluid retention etc ....still in the care home four years later.......0 -
As your mum is in her mid-80s I wouldn't think to invest in stocks and shares would be in her best interests. I would think NS&I and/or savings accounts which have the best interest rates, not putting more than the FSCS limit (which I think is £85k) in any one bank. I wouldn't think Premium Bonds are in her best interests. However I agree it may be best to get professional advice from an IFA.
Premium bonds are a safe haven and on average return 1.15% in income, so there could be worse places to put it. If the OPs mum is still with it mentally she might also enjoy being told about her latest win on Ernie.0 -
While the 1.15% figure is overall average figure which will include all the big wins in the calculation, I held Premium Bonds for 10 years and got nowhere near 1.15% in annual winnings. I suspect many 'investors' in PBs will get annual returns a lot less than the average.Keep_pedalling wrote: »Premium bonds are a safe haven and on average return 1.15% in income, so there could be worse places to put it. If the OPs mum is still with it mentally she might also enjoy being told about her latest win on Ernie.0 -
Thanks for all your helpful comments. I shall certainly be taking professional advice - thanks for the links - but you’ve raised a few things I’d not thought of - annuity for one. As Mum is mid 80s and being treated for a number of nasties it may not be the best option but I’ll check out what might be out there . She has attendance allowance and some kind of nhs contribution coming in and IHT shouldn’t be an issue as dads allowance carries forward.
One sibling is keen on us putting a bit in premium bonds. Any views?!
Bit of a difference of opinion on here about cash.
The circumstances you describe may actually make an annuity a viable option. If the medical view is that her life expectancy is seriously impaired the annuity rate would take this into account and provide good protection should the medical view prove to be wrong. But you need professional advice.0 -
Premium bonds are limited to £50k per person so if mum has £600k they really are pretty irrelevant either way.0
-
What about an investment bond in trust. Wide range of funds available, avoid probate, withdraw up to 5% without paying tax, very little paperwork, wide range of trusts available, just watch the IFA charges.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards