Dad put his retirement pot in to Mum's name and now she is being means tested

DiscoCat54

First of all apologies if I am posting this on the wrong board.

Secondly, thank you in advance for your feedback..

My father retired 25 years ago and for some reason (suspect it could be tax reasons however that's speculation) he put the money in to investments under my mother's name. My mother has never worked and receives a small income based on my father's pension.

She has been suffering from dementia for 2 years and following a fall two weeks ago her health has declined so rapidly that she will need to go in to an EMI unit. As she has saving over 23k she will need to pay for her care however my father, rightly or wrongly, is dismayed that he will lose his retirement pot. He has POA and doesn't want to cash in the investments for fear of being prosecuted for deprivation of assets.

Is he allowed to recover the money from Mum assets if he can prove that it was indeed his retirement pot or has he now lost it?

From my perspective if he can't recover it, it is no bad thing as Mum can then afford a better care home however Dad had plans of his own for his pension.

Many thanks

kidmugsy

If he can't document that it was a loan then I imagine that it was a gift. The local authority will presumably argue that a gift is a gift and that's that. Can't say I'd blame them: their job would be impossible if every chancer started to argue that so-and-so's money is really someone else's.

DiscoCat54

Thanks, kidmugsy. I suspect that he was only taking 'advantage' of her individual tax allowance and it wasn't meant as a gift however he can't have it both ways.

The unfortunate thing is that the tax he has saved is far less than the amount he was given on retirement..

A lesson to be learnt....

xylophone

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS10_Paying_for_permanent_residential_care_fcs.pdf?dtrk=true

may be worth a read.

her health has declined so rapidly

See

http://www.nhs.uk/CarersDirect/guide/practicalsupport/Pages/NHSContinuingCare.aspx

atush

It is common for married individuals to put assets into the name of the non or lower earner. He should contact the LA and certainly claim half the money as his- as a married couple in general assets are shared.

I am sure he can get out his old bank statements to show the money came from his pension commencement LS?

tincans6

please make sure you mum is at least claiming attendance allowance - if she is not already, which she will get while self funding.

Being pragmatic about things, it could have been your father needing residential care so splitting assets in each name can work both ways.

Not sure how far down the road you are in finding a suitable care home, but some are dismal.

Anchor homes which are nationwide and a not for profit charity seem pretty good (at least near me)

http://www.anchor.org.uk/our-care/nursing-care

DiscoCat54

Thank you all for your responses. Dad certainly doesn't want to defraud the local authority but is he legally entitled to remove his half of the assets and only declare my mother's half? It will still be over the 23k limit so his intention isn't to avoid paying, he just wants his own money back if possible. In reality, all of the money was his however he is resigned to only getting 50% back at best

kidmugsy

DiscoCat54 wrote: »

he just wants his own money back if possible. In reality, all of the money was his

No; if he gifted it, none of it is his. That's what "gift" means.

jamesd

DiscoCat54 wrote: »

She has been suffering from dementia for 2 years and following a fall two weeks ago her health has declined so rapidly that she will need to go in to an EMI unit. As she has saving over 23k she will need to pay for her care however my father, rightly or wrongly, is dismayed that he will lose his retirement pot. He has POA and doesn't want to cash in the investments for fear of being prosecuted for deprivation of assets.

As the holder of the POA he is required by law to use all of her assets for her care and he could face criminal prosecution if he fails to carry out his legal POA responsibilities towards her. This is much more likely where the failure to use assets properly is for the benefit of the POA holder, as it is in this case, since that is in effect stealing of the assets by the POA holder.

DiscoCat54 wrote: »

My father retired 25 years ago and for some reason (suspect it could be tax reasons however that's speculation) he put the money in to investments under my mother's name.

From that moment on there are two cases:

1. He genuinely gave the money to your mother. It is hers, as POA holder he is required by law to use it for her benefit.
2. He did not genuinely give the money to your mother but instead engaged in tax evasion and could face criminal prosecution as well as the requirement to pay back taxes and penalties.

DiscoCat54 wrote: »

She has been suffering from dementia for 2 years and following a fall two weeks ago her health has declined so rapidly that she will need to go in to an EMI unit.

So far as his pension goes this has significant good news because it is usual for life expectancy in such situations to be two years or less, sometimes as long as three. Of course this is personally bad news because it anticipates an early death of your mother.

DiscoCat54 wrote: »

He has POA and doesn't want to cash in the investments for fear of being prosecuted for deprivation of assets.

He doesn't need to be worried about deprivation of assets. He needs to worry about criminal prosecution for theft or fraud or for failure to do his duty as POA holder. There is also a substantial risk that the council may seek to have his role as POA holder removed and replaced by social services if there is any sign that he is failing to use her assets for her care.

DiscoCat54 wrote: »

Is he allowed to recover the money from Mum assets if he can prove that it was indeed his retirement pot or has he now lost it?

He can try but he may well not succeed and the cost could include losing POA to social services. He should expect that they will be aware of the potential for him to divert her assets to him and will take action to prevent this if they do not freely agree to let him keep some.

DiscoCat54 wrote: »

From my perspective if he can't recover it, it is no bad thing as Mum can then afford a better care home however Dad had plans of his own for his pension.

Your dad could easily screw this up so badly that he gets criminally prosecuted. It's unlikely but if he gets really determined to hide her assets and keep them for himself it probably will happen.

DiscoCat54 wrote: »

Dad certainly doesn't want to defraud the local authority but is he legally entitled to remove his half of the assets and only declare my mother's half?

It isn't the local authority that he would be defrauding. It's your mother. If he only declares half and diverts the rest of her assets to himself he should expect criminal prosecution for fraud and loss of POA.

The main thing to learn here is that if you give money away for tax purposes, you really have given it away.

margaretclare

She has been suffering from dementia for 2 years and following a fall two weeks ago her health has declined so rapidly that she will need to go in to an EMI unit. As she has saving over 23k she will need to pay for her care however my father, rightly or wrongly, is dismayed that he will lose his retirement pot. He has POA and doesn't want to cash in the investments for fear of being prosecuted for deprivation of assets.

Bit mystified by this. I thought EMI homes came under the NHS umbrella and were therefore 'free of charge'? The reason I think this: I used to know a couple who were affected by this. He used to go to the local EMI/mental health unit on a day-stay basis, then full-time but allowed to come out at weekends, come to church etc (it was thought to be good for him) and then a new purpose-built EMI unit was opened and he ended his days there. Because it was NHS mental health there was no question of paying.

From my perspective if he can't recover it, it is no bad thing as Mum can then afford a better care home however Dad had plans of his own for his pension.

But he gave it away! It would have been just the same if Mum had decided to leave him, have a Saga divorce, and take the whole lot with her! It does sound as if his clever tax dodge went the way he didn't foresee and wouldn't have liked if he had.

xylophone

OP, have you had a look at the NHS link in 4 above?