Investing for relative who's lost mental capacity.

peaceandplenty

re-posted from Money Savers Arms - hope this forum is more suitable:
Can someone who has been there share some advice re court of protection?
My partner has been granted ‘cop’ for his elderly uncle. Is there a logical way he should proceed to best manage the uncles affairs? The things that have come to mind are: arrange to have the uncles post redirected to here, set up direct debits for the utilities, spread the uncles savings over several different banks to keep it protected should a bank/building society fail (there’s 750,000 all in one building society atm). His uncle is still living in his own home with carers coming in and this is working well for now. We are aware of the need to keep a clear record of all financial matters and already have this in place as we have been paying some of his uncles bills etc. already while waiting for the court of protection to be put in place. Thanks in advance for any tips / ideas you can share.
Although he could live 15 yrs, in reality, he is very frail and will be lucky to see out this year so don't need to generate much interest for him but do need to keep his saving safe and easy to manage. Thanks.

xylophone

Would you wish to move the £750000 to NS&I Direct Saver while you are thinking about what to do with it? http://www.nsandi.com
An ISA is also offered.

peaceandplenty

That's a good idea, I didn't realise there was somewhere where it could be kept safe all together over the 85,000 limit of most places. I have no problem keeping under this limit personally so haven't had occasion to look for a way to keep more than that safe! Would keep things nice and simple while we concentrate on the practical stuff such as setting up direct debits for his utility bills etc.

atush

It sounds like all your proposed actions would be in the interest of your/his client (ie uncle). you seem to be thinking of all the steps needed to ensure his financial safety.

The NSI is greatuntil the paperwork is sorted out, as again that complys with someone protecting the individual

But, given the possibility of him exceeding his current estimated LE, do look at longer term investing. From investing a proportion of the money to enable growth to meet/beat inflation in equities, to buying specialist instruments to provide a sum for long term care.

badger09

atush wrote: »

But, given the possibility of him exceeding his current estimated LE, do look at longer term investing. From investing a proportion of the money to enable growth to meet/beat inflation in equities, to buying specialist instruments to provide a sum for long term care.

Really? Longer term investing with £750k available?

I don't have any experience of long term care costs if there is a substantial 'nursing' care element, but mum in law is in an excellent residential care home where this sum would fund approx 25 year's of care. At 88 that's unlikely to be necessary.

Don't know the age of the gentleman in question, but OP has said he "could live 15 yrs, in reality, he is very frail and will be lucky to see out this year so don't need to generate much in interest" so why risk his capital by investing? And would that in fact be in his best interest?

BobQ

Seems unlikely he will continue to live independently for much longer but clearly this depends on what he wants. Have you actually asked him? With £750K plus (I assume a house) this could fund a very nice residential care home but clearly its his decision.

My view is that you would not be acting in his best interests to use equities unless he is realistically expected to live more than 15 years. I would transfer to NS&I immediately, then look to open sub-£85K accounts in different institutions. Some could be put into 3-5 year fixed term savings but I would keep enough in instant access to enable residential care to be funded.

The important thing to remember is that you are investing for him not yourself.

Why re-direct all his mail? With POA you can ask institutions to send you bills and statements. But surely he might need letters about for example medical appointments? How often do you visit? You could collect any mail you need then.

grey_gym_sock

i think a low % in equities is justifiable. because there is always a possibility that he will live longer than expected (and might need to pay for a care home), and then inflation becomes an issue. if he doesn't live very long, then there is going to be a lot of money left over, in which case it won't matter either way whether part of what's left over is in equities.

peaceandplenty

I have phoned for the application for NSI account. We may well look at accounts/bonds with a better interest rates in the future as, although he is frail right now, he may rally - it is hard to tell how much his low state is due to bereavement due to losing his wife recently and how much can be accounted for by old age / dementia. He is 85 so I do think the money he has is enough for the years he has left so won't be taking any risks with his money. He does have a house too but it is held in trust which I think means it can’t be sold for his care?
If the money is used to buy 3-5 years bonds and he dies before the bonds mature, does he get a percentage of the interest or just the money that was originally put in?
I think we do need all his mail redirected as he is not capable of putting a hospital appointment on a calendar and remembering to go so it is better if we can phone social worker / carers and let them know to get him ready on the right day. If there is anything he has to have, the neighbour is ok with us sending it to her and she can pop next door with it.
We don't visit at all, we are 500 miles away but he doesn't have any other relatives besides my partner, partners brother and mother. Old uncle has no idea who we are and would probably find it disturbing if we turned up on his doorstep. I met him once for half an hour 2 years ago. Mother in law phones him once a week but, despite knowing her for 40 odd years, he no longer understands who she is so I don't think there is a benefit for him to try and establish a relationship with him now. So, no, we haven't asked him if he wants to stay in his home or not as he doesn't seem capable of holding a train of thought long enough to make the decision or even understand what is being asked. I'm just assuming that he wants to stay in his home as long as possible and we have asked the social workers / district nurses / carers to let us know if the situation changes. He has a good team supporting him and can only hope that we have assumed correctly.
Thanks for all the help on here, there is a lot to get our heads around so it is good to have a sounding board and access to good advice.

xylophone

He does have a house too but it is held in trust which I think means it can’t be sold for his care?

This will be a matter for the Trustees who are bound by the Trust Deed - presumably they are aware of Uncle's situation?

If the money is used to buy 3-5 years bonds and he dies before the bonds mature, does he get a percentage of the interest or just the money that was originally put in?

You might opt for monthly interest if available- otherwise the interest will be paid according to the terms of the bond.

If he should die during the life of the bond, interest will still be due to his estate - the terms of the bond will state what happens on the death of an investor.

BobQ

peaceandplenty wrote: »

I have phoned for the application for NSI account. We may well look at accounts/bonds with a better interest rates in the future as, although he is frail right now, he may rally - it is hard to tell how much his low state is due to bereavement due to losing his wife recently and how much can be accounted for by old age / dementia. He is 85 so I do think the money he has is enough for the years he has left so won't be taking any risks with his money. He does have a house too but it is held in trust which I think means it can’t be sold for his care?
If the money is used to buy 3-5 years bonds and he dies before the bonds mature, does he get a percentage of the interest or just the money that was originally put in?
I think we do need all his mail redirected as he is not capable of putting a hospital appointment on a calendar and remembering to go so it is better if we can phone social worker / carers and let them know to get him ready on the right day. If there is anything he has to have, the neighbour is ok with us sending it to her and she can pop next door with it.
We don't visit at all, we are 500 miles away but he doesn't have any other relatives besides my partner, partners brother and mother. Old uncle has no idea who we are and would probably find it disturbing if we turned up on his doorstep. I met him once for half an hour 2 years ago. Mother in law phones him once a week but, despite knowing her for 40 odd years, he no longer understands who she is so I don't think there is a benefit for him to try and establish a relationship with him now. So, no, we haven't asked him if he wants to stay in his home or not as he doesn't seem capable of holding a train of thought long enough to make the decision or even understand what is being asked. I'm just assuming that he wants to stay in his home as long as possible and we have asked the social workers / district nurses / carers to let us know if the situation changes. He has a good team supporting him and can only hope that we have assumed correctly.
Thanks for all the help on here, there is a lot to get our heads around so it is good to have a sounding board and access to good advice.

If your uncle is comfortable in his own home and no danger to himself, fine, especially if some people are watching him. But he does seem to be quite vulnerable from what you say.