Joint Account versus Power of Attorney

strontian

My dad is in his late sixties and wants me to open a joint account with him that will allow me to access his £40k savings if something happens to him or he becomes incapacitated.

I have reservations that if I get made redundant I won't be able to claim Jobseekers or Housing Benefit—I understand that this is the case if you have (or at least declare :S) savings of over £16k.

I also wonder if I will encounter any tax implications?

The money was left to my dad from his mum but I'm not sure if there was any inheritance tax paid, and by opening a joint account would I be liable to any charges as it'll be dually under my name?

Also, will it impinge on the amount I'm allowed to save in other ways?

I wonder if Power of Attorney is a better option but need some advice! :S

Thanks in advance!

xylophone

http://www.hughjames.com/news/news_library/2012/june/joint_ownershipsurvivorship.aspx#.UWwZD7_fZms http://www.marsdenrawsthorn.com/law-news/2396/Joint_account_can_cause_inheritance_tax_problems
might be worth a look.
You and your father need to understand the position of your own bank on survivorship and joint accounts. Example here.
http://ask.barclays.co.uk/resources/barclays/day2day_banking/2012
http://www.adviceguide.org.uk/england/debt_e/debt_banking_e/joint_bank_accounts.htm

A POA does not stand after death when the administration of the deceased's affairs falls to the executor where there is a will or to the person who takes out Letters of Administration if there isn't.

If you hold a joint account and have full signing powers/your own debit card etc, it is quite likely that you would be held to be the owner of half the money for tax and benefit purposes.

http://www.hmrc.gov.uk/manuals/saimmanual/saim2420.htm
http://www.hmrc.gov.uk/inheritancetax/how-to-value-estate/joint-property.htm

colalba

A power of attorney is usually much wider in scope that having a joint bank account.

In Scotland (I note you are in Scotland and am assuming your dad is too) a power of attorney must be registered with the Office of the Public Guardian. Their web site has good information including examples of the different areas your father may wish to have covered by the PoA .

I can't post a link as a newbie but see ...
publicguardian-scotland.gov.uk

A PoA can cover financial /property affairs known as "continuing powers" and/or Welfare powers e.g. health.

It is obviously something your dad has to consider very carefully but would allow you to handle other situations in the future if he was to lose capacity not just the bank account.

Note it is your dad who gets the power of attorney drawn up and this can only be done when he has capacity.

One of my parents had one done recently via a lawyer and was quite straightforward. Hopefully this will never be needed but it should make thinks easier if it becomes necessary.

ps if your dad is not in scotland ignore this as I think the system in rest is UK is slightly different.

grizzly1911

In the event of mental incapacity

If one joint account holder loses mental capacity, the bank should freeze the account. The other joint account holder does not automatically have the right to access the money, unless they have authority under a Lasting Power of Attorney or an Enduring Power of Attorney, or there has been an order from the Court of Protection.




The British Bank Association booklet entitled
You and your joint account

states at page 6:





Arranging for someone to make decisions about your finance or welfare

If the other joint account holder becomes mentally incapable, the bank or building society must get an order from the Court of Protection (in England and Wales), which protects the rights of mentally incapacitated people, before they can let you use the account.

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS22_Arranging_for_someone_to_make_decisions_about_your_finance_or_welfare_fcs.pdf?dtrk=true

strontian

That's great, thanks everyone for your help.
Much appreciated.

ANGLICANPAT

Im not knowledgeable enough to know whether this would work in your circumstance, but its worth looking at 3rd party signing abilities on the account. I have that on an elderly relatives account which makes life easier when she has 'bad patches' . I can sign cheques and move money online, take money out physically and generally do most things, Its not my money so Im not taxed on it.

6022tivo

Does anyone know the easiest way of obtaining PoA.
My solicitor wants to charge me £1k?

Vortigern

6022tivo wrote: »

Does anyone know the easiest way of obtaining PoA.
My solicitor wants to charge me £1k?

Cheapest way is to do it yourself
http://www.justice.gov.uk/forms/opg/lasting-power-of-attorney
Download the forms, or send for a set. Follow the guidance on the OPG site.