POA:Evidencing loans to elderly mother

Daniel54

I hold enduring POA for my 89 year old widowed mother,who no longer possesses all her mental faculties and is physically very frail.Medical opinion is that she is most unlikely to live a further 12 months,but is not yet" end of life".

She is still in her own home but this requires two full time live in carers.She has a good pension but the care costs are rapidly diminishing her capital.However this arrangement gives her the best quality of life ,diminished though it is,and my sister and I are in agreement that we will not move her to a home unless it becomes absolutely necessary.

To eke resources out I am contributing to her costs by transferring monies into her account marked as a loan and keeping copies of both her and my statements reflecting the transfer.Her estate,which will essentially be the house and some valuables within it,will be near to or marginally exceed ( by up to 10%) the £610k remaining of the joint IHT allowance.

When the time comes,am I doing sufficient to show that my contributions are loans that can be deducted from the probate value ? If not,I would appreciate any advice as to what should be done

Many thanks in advance for any assistance

xylophone

You need a clear audit trail that shows that any money you have transferred to your mother's account comes from your own financial resources and has been used solely for her care, support and maintenance.

You seem to be saying that when you transfer money to your mother, the reference clearly shows that it is a loan.

You might also wish to keep a spreadsheet showing the running total with the account pages for your and your mother's accounts.

Presumably you have also advised your sister of the arrangements you have made?

Keep_pedalling

I'm not sure if regular payments into her account could really be seen as a lone, so you may be increasing any IHT that may be due on her death. I think you really need to take some professional advice on what to do here.

Daniel54

Thank you both for your replies.

I can show a clear audit trail from my deposit account to my current account to her current account and then the payment to the care agency.I can see I should set up a file and a spreadsheet detailing all and any payments that I can present if required.There have been no credits of any sort from her account to mine.

I am very aware of the duties under a POA.In this context it is unsustainable that her outgo exceeds her income by £70k pa,as it will this year. So logically I /we should secure her future by moving her to a home and selling the house,but that's a decision I would rather not make if we end up looking at months rather than years.

My sister is a joint attorney and she is aware I am subsidising the current arrangements.We are also agreed these are not sustainable on a long term basis .There are some difficult decisions to make in the New Year.

I am making payments ad hoc rather than regularly each month. Her issue is liquidity and in terms of her total wealth she has no need for a gift.I happen to be in communication with her accountants so I will take up the suggestion and ask them the question.