Power of Attorney - how to apportion income for spouse

ruffles_3

My mum holds Enduring Power of Attorney for my dad, who has advanced dementia. For the last several years that she's had EPA she's been scrupulous in keeping all bank statements, invoice for larger bills, etc, but has continued to operate all their finances from their joint bank account.

We saw a solicitor a few days ago about a different issue, and she pointed out in no uncertain terms that Mum ought to have set up a single bank account for Dad, with her as attorney.

My question is a very practical one: when we set up this separate account, how do we apportion income? I understand that in terms of LA assessment for care fees, they would classify Dad's private pension as being split 50/50 between the parents - Mum has no private pension of her own. I understand from the solicitor we saw that Dad has a duty of provision (I think that's the correct term) towards Mum, so my initial thought is that we deduct the regular utility bills for Mum's home (co-owned by Dad) and the cost of running the car (which she needs to visit Dad), and then split the remainder of the pension 50/50. When work needs to be done on the house, 50% of that can be paid for from Dad's account, and 50% from Mum's money.

My feeling was that utilities could be justified coming from the joint income before the split because they're used, at least in part, for maintaining the house which Dad co-owns, and so protecting his investment there.

I know this is a very basic question, but I don't want to give Mum bad advice on this, especially as I'm already struggling to get her to understand it's apparently necessary.

Thanks in advance for any guidance.

getmore4less

I think Iwould come from the other angle.

When will this actualy make a difference.

What future problem is this solving

If she carried on as she has, what problems can happen.

ruffles_3

getmore4less wrote: »

I think Iwould come from the other angle.

When will this actualy make a difference.

What future problem is this solving

If she carried on as she has, what problems can happen.

Very good questions, thank you!

'When' is going to be very tricky, because although we can do it from, say, 1st April and do this going forward, I'm not sure what we do about everything that's happened to date.

'Future problems solving' - several websites seem to indicate that splitting the income in this way should make it clear whose money is whose if means testing is carried out for Care Home fees (currently he's funded by CHC).

'What future problems can happen' - I think we could end up in hot water if Mum's actions as Dad's EPA are ever scrutinised and it turns out we received this advice (delivered somewhat strongly) from a solicitor experienced in Court of Protection work and chose not to follow it. I'm particularly worried about this last point because we intend to apply to the Court of Protection about something to do with Dad, which I should think practically invites scrutiny.

Those are my thoughts about why we need to do this. I would be more than happy to hear alternative views.

Biggles

The suggestion to split the joint account is presumably in connection with means testing and nothing to do with the EPA specifically. If the solicitor thought it was a good idea, I'm surprised she didn't tell you how she thought it needed to be operated.

I'm not sure of the benefits. To begin with, I would imagine it's very rare for a resident to go from Continuing Healthcare to Local Authority funded - that would imply a significant improvement in health as he got older. Secondly, as things stand I believe the LA would use 50% of the cash as your father's. If the account were split, and operated in the way you suggest, your father's account would then receive 50% of the income but bear less than 50% of the expenditure, so his cash balance would soon exceed your mother's, meaning a higher LA charge.

Why do you need to go to the Court of Protection, your mother already has PoA? I think it may, as you suggest, invite unnecesary scrutiny.

ruffles_3

Biggles wrote: »

The suggestion to split the joint account is presumably in connection with means testing and nothing to do with the EPA specifically. If the solicitor thought it was a good idea, I'm surprised she didn't tell you how she thought it needed to be operated.

It's becoming clear to me that we should ask the solicitor this question exactly. I did find, on looking through the Government-produced booklet my mum was sent when she was granted power of attorney, that they suggested a separate bank account, but there was no clarity on why nor how to operate it.

As for moving from CHC to LA funding, I've read about many cases where CHC funding is withdrawn for people with dementia when they become less mobile and no longer display "challenging" behaviour. Whilst doing so solely on these grounds is against the National Framework, it doesn't seem to stop PCTs doing it, arguing that needs are no longer unpredictable and ignoring the nature, complexity and intensity of those needs. So it seems sensible to me to assume worst case scenario, even while hoping it doesn't arise.

Biggles wrote: »

If the account were split, and operated in the way you suggest, your father's account would then receive 50% of the income but bear less than 50% of the expenditure, so his cash balance would soon exceed your mother's, meaning a higher LA charge.

That's an extremely good point. I think we need to go back to the solicitor and ask these questions.

The Court of Protection approach is about a Deed of Variation for a will and is, unfortunately, necessary.

Thanks very much for your thought-provoking and helpful response.

ruffles_3

Biggles wrote: »

The suggestion to split the joint account is presumably in connection with means testing and nothing to do with the EPA specifically.

Sorry, Biggles - just realised I didn't anwer this. The solicitor definitely said that, as Dad's attorney, she should be operating a bank account in his name, and that the bank should have notified her of this. She was quite appalled the bank hadn't done so.

As you suggest, I think we need to go back to her on the nitty gritty of how it should be operated in order to discharge attorney obligations properly.

jennifernil

I would never have thought of setting up a separate current account if I ever had to use my POA for OH.

As Biggles said, splitting income would only need to be done if there was an assessment for care home fees, in which case it would only be the income at the time, plus any sole/half of joint savings that would be taken into account.

Biggles

ruffles wrote: »

Sorry, Biggles - just realised I didn't anwer this. The solicitor definitely said that, as Dad's attorney, she should be operating a bank account in his name, and that the bank should have notified her of this. She was quite appalled the bank hadn't done so.

That's just not true. She is still perfectly entitled to operate their joint account just as she had done before, her husband's dementia doesn't change that. She doesn't even need a PoA to do it, but the fact that the bank are aware of the PoA (I think that's what you were inferring?) shows that they are happy with the arrangement, and that's all that matters.

If the solicitor could give any reason for her suggestion, I'd be interested to hear it, but I suspect you are paying her quite enough already without adding to the bill.

I would leave it as a joint account.

ruffles_3

Biggles wrote: »

That's just not true. She is still perfectly entitled to operate their joint account just as she had done before, her husband's dementia doesn't change that. She doesn't even need a PoA to do it, but the fact that the bank are aware of the PoA (I think that's what you were inferring?) shows that they are happy with the arrangement, and that's all that matters.

If the solicitor could give any reason for her suggestion, I'd be interested to hear it, but I suspect you are paying her quite enough already without adding to the bill.

I would leave it as a joint account.

My understanding from the British Bankers' Association publication on joint accounts is that POA is necessary for the continued operation of a joint account in England or Wales if one party becames mentally incapable. Of course, very helpfully, I neglected to mention in my OP that we're in England because I hadn't fully appreciated different laws(? rules?) apply.

We may yet find the bank isn't happy with the arrangement, because they were only informed of the whole POA a few weeks ago so we may hear once it's worked through their system, but I'll keep my fingers crossed they don't.

I really appreciate your response; leaving it as a joint account is definitely sounding more practical so long as we're not doing anything we shouldn't be by doing so.

If there's an opportunity to ask the solicitor in passing - ie not making a huge issue of it and incurring further fees!! - I'll ask her for her reasoning and post it here.

ruffles_3

jennifernil wrote: »

I would never have thought of setting up a separate current account if I ever had to use my POA for OH.

As Biggles said, splitting income would only need to be done if there was an assessment for care home fees, in which case it would only be the income at the time, plus any sole/half of joint savings that would be taken into account.

So it sounds as though, so long as we can demonstrate that Dad's money has been put into savings where it hasn't been used for permissible expenses, things should be okay.

Thanks very much for responding - much appreciated as I try to navigate through all this stuff.

jennifernil

This is an interesting discussion as, on a connected theme, I have been wondering how savings would be treated if one of us ever needed care.

I have a very small state pension, claimed on OH's contributions, he has over 90% of our income. But to use my personal allowance, all our taxable savings are in my name, he has his ISA accounts and some in NS&I meantime. So total savings are split about 30%/70% in my favour.

We have no joint savings, and only one joint current account that all our pensions are paid into. All bills are paid from this, then the surplus moved to my easy access savings, and possibly to ISAs if there is enough.

If OH needed care, would we be compelled to split these 50/50?

And if I needed care, would we be allowed to split savings 50/50?

Hopefully we will never need care, but it is good to be prepared.