Using power of attorney

Keep_pedalling

Yorkshireman99 wrote: »

That is a clear beach of the rules. Payments must be for the direct benefit of the donor. Also it is obvious asset deprivation. The solicitor was simply wrong. He was lucky not to haves been caught. There regulation is not as effective as it might be.

Not nessasarily a breach of the rules under all circumstances, it depends on the donor's financial circumstances and their gifting history prior to becoming incapacitated. Someone acting for a donor with considerable assets that will easily see them through their final years who also regularly gave large gifts each year, could continue doing this, but this is only likely to be applicable to a very small number of people, and does not appear to be the case with the OPs MIL

getmore4less

The £3000/£259 are purely IHT PET exempt limits.

Keep_pedalling

Perict, does you MIL receive attendance allowance?

If not this is one thing you can do to help fund her care fees. As a self funder she should qualify for this non means tested benefit.

macca1974

as has been said above, you can make gifts on behalf of your mother in law, but only if they are in line with what she made prior to you having the power of attorney. The £250 and £3K limits are related to Inheritance tax, I would have thought though that if the estate is being depleted by the care fees then it is unlikely to be above the nil rate band of £325K anyway?

A brief google brought the attached link to the Government website which gives a very comprehensive guide to this question.
www gov uk / lasting-power-attorney-duties/property-financial-affairs

Perict

Many thanks for your advice. I have checked the LPA website, and you are correct that any gifts must be in line with previous patterns of gift giving. I should have made it clear that my MIL is way beyond being capable of making any decisions, but my wife is her only daughter and there is no way we would allow the LA to move her from where she appears content. We have already committed to fund her ourselves if that situation ever arose. The idea of a funeral plan was originally my MIL's but she deteriorated before we did anything about it. My wife is the sole beneficiary of her will so the only question is whether we fund the plan now and recover the cost on her demise or take the cost out of her account, which, as I said would mean the burden of her care falling on the LA alittle bit earlier. I am concened that the latter might be seen as deprivation of assets because, of course, I cannot prove that it was her intention. Any thoughts? Again, many thanks for your response.

Yorkshireman99

Perict wrote: »

Many thanks for your advice. I have checked the LPA website, and you are correct that any gifts must be in line with previous patterns of gift giving. I should have made it clear that my MIL is way beyond being capable of making any decisions, but my wife is her only daughter and there is no way we would allow the LA to move her from where she appears content. We have already committed to fund her ourselves if that situation ever arose. The idea of a funeral plan was originally my MIL's but she deteriorated before we did anything about it. My wife is the sole beneficiary of her will so the only question is whether we fund the plan now and recover the cost on her demise or take the cost out of her account, which, as I said would mean the burden of her care falling on the LA alittle bit earlier. I am concened that the latter might be seen as deprivation of assets because, of course, I cannot prove that it was her intention. Any thoughts? Again, many thanks for your response.

Which is why I have been urging extreme caution. The potential penalties for getting it wrong are severe. From what you have said there is no past pattern of giving. The amounts quoted a possible are simply those that HMR&C accept when calculating IHT and, AFAICS, have no relevance to the current situation. I would suggest you really need paid for advice from a professional with appropriate expertise. The average family solicitor is unlikely to have that expertise.

Toxteth_OGrady

Notwithstanding the deprivation of assets aspect, there is a de minimis exception for gifting by attorneys and Court of Protection deputies but the gifting must pass a 'reasonableness' threshold:

Senior Judge Lush identified what he termed a reasonableness threshold, being a limit beyond which gifts made by deputies would be considered as unreasonable. This threshold would differ from case to case. However, a gift would have to fall within a de minimis exception. Gifts outside this exception would have to be approved by the court.

A de minimis exception was to be construed as covering the annual IHT exemption (£3,000) and the annual small gifts exemption of £250 per person, up to a maximum of ten people in the following circumstances:

P had a life expectancy of less than five years.

P's estate exceeded the IHT nil rate band.

The gifts were affordable, taking into account P's care costs, and would not adversely affect P's standard of care and quality of life.

There was no evidence that P would oppose the extent of the gifts made on his behalf.

Google the terms 'de minimis exception power of attorney senior judge lush' for more info.

Savvy_Sue

Yorkshireman99 wrote: »

You cannot do any of those things as the POA does not allow them. Also the scheme would constitute deprivation of assets under DWP rules.

You're quite possibly right about the gifts, but buying a funeral plan is NOT considered Deprivation of Assets, and if the attorney discussed it with Mother before she lost capacity and Mother thought it a good idea, then it seems an entirely reasonable thing to do.

Yorkshireman99

Savvy_Sue wrote: »

You're quite possibly right about the gifts, but buying a funeral plan is NOT considered Deprivation of Assets, and if the attorney discussed it with Mother before she lost capacity and Mother thought it a good idea, then it seems an entirely reasonable thing to do.

Fair enough but what real benefit would there be in buying a funeral plan in the circumstances?

Mojisola

Yorkshireman99 wrote: »

Fair enough but what real benefit would there be in buying a funeral plan in the circumstances?

It would mean that the level that entitles the person to financial support from the council would be reached sooner.