Plerase help - really need some advice before lawyers apppointment

Job_22

Hope I am posting in the right place, and some knowledgeable person can help. I am in Scotland.

My sister died earlier this year. I am executor of her estate, and POA for my brother-in-law.

Her surviving spouse, my- brother- in law (Kevin) is very disabled, but was still living at home with a local authority care package. Her death necessitated his moving into a permanent nursing home.

They have one surviving son (Josh), who is 22 and still lives in the family home.

The outstanding amount of the endowment mortgage is 55,000.

We are currently trying to sort out my sisters estate, and the ongoing care needs of Kevin.

The local council are doing an assessment for Kevin's liability for care costs. Apparently, they will not deduct the amount of the mortgage debt.

Kevin has a good income comprising two pensions and disability allowance.

Kevin has recently received a cheque for 25,000, from Standard Life, which is half of the life insurance on their jointly held mortgage debt. I assumed this money would go direct to the mortgage company, However they have sent a cheque payable to Kevin and as his POA I am going to the bank on Weds to open an account and pay it in.

My concern is that this money will be counted as assets or savings when Kevin's financial assessment is done. This seems unfair, given that he only received this money because my sister died.

Surely this money could be used to pay off half of the mortgage debt, as it was joint debt?

Can the council force my nephew Josh to leave the family home and have it sold to pay for his fathers care. I was hoping that if this is the case, by paying off half the debt with this Standard Life cheque it would mean more free proceeds to be split after sale.

If anyone can give me any advice to arm me before I see this lawyer (who is not very helpful, but cannot afford to change horses during the race) I would greatly appreciate it.

Job

aggypanthus

I have a joint SL endowment and it pays the full amount in event of whoever dies first, why did you only get half? I understand this money is soley for the purpose of paying the mortgage, but its only my opinion.
I am sorry for your loss.
Dont open new account, pay it into existing mortgage account, that way it csnt be deemed savings, again, I merely opine.

Job_22

Thank you...I have absolutely no idea why only half of the insurance was paid out.

Although we know my sister took her own life, the death cert states the cause of death to be 'unascertained' and the payment is definitely in respect of her SL policy.

This is one question I have to ask the lawyer..thank you for noting it!

dunstonh

The mortgage is one thing and the endowment is another. The endowment may have been set up at the time the borrowing was only £25000 but your sister may have borrowed further amounts and did not take out a life assurance on the increased borrowing. So, you may want to find out the history of the borrowing to understand why there is a difference.

The insurance would pay the full sum assured on death.

My concern is that this money will be counted as assets or savings when Kevin's financial assessment is done.

It will be if it is not used against the mortgage.

This seems unfair, given that he only received this money because my sister died.

The purpose of the endowment was to go against the mortgage debt. So, as long as it does that, it wont be included and that is fair as the money is going where intended. You appear to want that anyway so that is fine.

Can the council force my nephew Josh to leave the family home and have it sold to pay for his fathers care.

Good question. Where there are minor children or a spouse they would not force sale but a child of 22 may be too old. This is something to get advice on.

Job_22

Thank you dunstonh for explaining that. I am a bit clueless about mortgages (having been a real dolly dimple and having had an other half who has always dealt with that side of our marriage!) I do however think that my sister and her husband jointly only ever borrowed 55,000, way back when they bought their first house together in 1983. I also saw a letter dated some time ago from SL which warned about a shortfall? All paperwork is now with the lawyer. She is not great at explaining things to me which is what has prompted my visit here to try to get a handle on it all myself.

dunstonh

I also saw a letter dated some time ago from SL which warned about a shortfall?

A potential shortfall would only apply if the plan went to maturity. On death, the full amount is paid out.