Power of Attorney - Who 'Owns' Joint Savings?

Fire_Fox

Hope someone can advise.

I have Enduring Power of Attorney over my parents affairs, set in place in 1995 'just in case'. My parents are now retired but with full faculties: as a result they travel abroad extensively. They manage their own accounts remotely where possible.

For various reasons we have elected for me to control a large sum of money which has been deposited in the Post Office in their joint names. I have managed this fine using the PoA and am presently in the process of moving it to a better interest account with Tesco.

Tesco want the new savings account to have me named on, so will just be Mum and I. The cheque from PO is in Mum's name and I have recorded online that she is depositing the full amount. I am also writing a letter to this effect which I am asking is kept on file.

I am a full-time mature student in receipt of a maintenance grant as I have no major savings. I am a bit twitchy about this large sum being in a savings account with my name on, as I don't want it to look to the Student Loans Company like I am claiming fraudulently. I will of course be up front about this with them.

My question is really - legally, who's money is it when savings are held jointly? Is it possible to do as I am attempting and dissociate myself from the money? Has anyone experience of this?

Thanks.

Edinburghlass_2

Someone I knew had a joint account with his Mum with her money just so if anything happpened he could access it but the tax people decided half of it was his so I'd look more carefully into this.

LittleVoice

I would try advising them that £1 is nominally yours (perhaps pay in a single £1 yourself which is designated as your money) and that beneficial ownership is not 50:50 but £1:whatever else is in the account.

Savvy_Sue

I think that if it's in joint names, it's legally both of yours, and I don't know if you CAN legally dissociate yourself from it.

However, when the boys were younger their Britannia accounts were held with my name as well as theirs, and I think it was something like Mrs Savvy Sue re: Master DS1 etc. In that case I think it was their account, but with my name on because they were too young to sign when the accounts were opened.

Other posters have found that some companies are better than others at dealing with funds held under PoA, and it may be that Tesco are less good if they won't open the account without your name on it too.

Biggles

Nearly all banks can handle PoA accounts and the money remains in the ownership of the donor(s).

But they all have special arrangements for PoA accounts, eg they can't be opened online and the forms must be filled out exactly as they request - often special forms purely for PoA a/cs.

Otherwise you will end up being a part-owner of the money, which isn't what you want and certainly isn't what your parents want.

It's quite normal to have your name appear somewhere on the account, and for correspondence to be to you, but the bank has to know it's a PoA account to begin with.

You should talk to Tesco urgently.

sloughflint

I am guessing that it's the Internet saver that you are opting for. I could not see anything about Power of Attorney on the website.

Many solely online accounts will not permit POA.I do hope you have not spoken to a poorly trained person who has merely suggested that you become a joint account holder.

If so that is a very bad idea. Have they asked to see your POA documentation? If not and the account is open then I feel that there is a problem and as Biggles says, talk to Tesco pronto.

Edinburghlass wrote: »

Someone I knew had a joint account with his Mum with her money just so if anything happpened he could access it but the tax people decided half of it was his so I'd look more carefully into this.

Generally not an ideal arrangement. That was offered to me ( suggested to family by bank!) but I declined and asked to have POA instead.

Not only are there tax implications but the real account holder's money is not necessarily safe ( eg divorce,bankruptcy of the 'joint' account holder).

Biggles

I think your maintenance grant is the least of your problems.

The money was jointly owned by your parents; it's now jointly owned by you and your mother. At face value, you have wrongly used the PoA over your parents' affairs to make a gift of your father's share of the Post Office account to yourself.

The potential implications (ownership, your grant, income tax, IHT as well as the problems already mentioned by Sloughflint of divorce, bankruptcy etc) are horrendous. Talk to Tesco.

monkeyspanner

We had similar problems setting up a Tesco Internet account for my MIL. My wife had a POA for her mother but Tesco still wanted my MIL to sign all the forms (not possible she was too ill at the time). In the end we gave up and asked for the cheque to be returned. This was not the only bank with which we had problems e.g. Abbey do not allow the account holder and POA to have ATM cards on an account it is one or the other.

If I were you I would definitely not open a joint account with either of your parents. As Biggles says there are all sorts of legal and tax implications. Your father's half could be viewed as a gift to you if he were not named on the account and what would happen to the half in your name if you died before your father?

This sounds like fairly typical bad advice being given by badly trained bank workers who do not understand POAs. I would try to get the joint account set up in your parents name and then register your POA.

sloughflint

monkeyspanner wrote: »

what would happen to the half in your name if you died before your father?

If OP died before the mother, the entire funds would become the property of the mother.

If the mother died first, the funds would then legally belong to OP. A nightmare in itself for the executors of the mother's Will. And then of course if OP died before the father, those funds in turn would be distributed according to OP's Will or rules of intestacy.

All in all a dreadful idea but many do it as Edinburghlass showed.

Edinburghlass_2

Actually what I meant to do was warn the OP not to put their name on the account but probably badly worded.

Fire_Fox

Thanks very much everyone.

The account is not finalised - I have asked for a cheque from the Post Office in my mother's name only and this is to be sent with ID for both parties. I also intend to enclose the PoA and a covering letter clarifying the situation. My mother will also write her own covering letter confirming that the money is her property.

The lady I spoke to at Tesco last time went and asked her supervisor, but seemed pretty knowledgeable herself. But obviously I am very worried by the suggestion that it may appear I am using the PoA wrongly.

My parents would not have a problem with gifting some of the money to me, in fact that is the intention at a later stage (they paid my brother's flat deposit). But it isn't my money right now, I just have the PoA in case of emergency.