Planning: Elderly parent bank accounts

iansp

Sadly, I recently lost my Mam. She and my dad wanted me to become what they term a 'co-signatory' on their remaining bank accounts after that happened.

The only thing I can see that would achieve that would be to have a joint account wth my Dad. I think that's a bad idea for a lot of reasons.

Having just gone through sorting out my Mam's affairs though, my Dad and I are keen to make it as simple as possible for me to tidy up his affairs when he does one day (hopefully in the far future) pass on.

Is anyone aware or any accounts or arrangements I can make that will enable me to access/tidy up his affairs when he does pass on?

(If he was in danger of being unable to sort his own affairs out, I know he would look at power of attorney- but that's only for when you are living, as I understand it.)

Skibunny40

Not sure why you're not keen on a joint bank account? All you need to do is add your name - your dad can continue to run the account as his own after that.

It's worth getting Power of Attorney now - unfortunately you never know what can go horribly wrong (health, accident) overnight. It's a lot easier & faster to get PoA when your dad is fit & able to sign the paperwork.

xylophone

You can get a POA for financial and health and welfare matters and this would be a good idea.

it can be used as necessary - see below.

https://www.gov.uk/power-of-attorney/overview

However, it would be convenient to have a joint account with your father on the basis that it might be convenient for occasions when eg he needs a payment made and does not want/ feel up to dealing with matters himself - suppose he had a bad case of flu say, or broke his arm or leg?

LXdaddy

+1 for getting the Power of Attorney sorted while your Dad is fit and well. Coping with the affairs of a relative who is no longer capable is very much harder when every transaction has to go through the court of protection.


I'd also consider seriously the idea of being a co-signatry

alanq

There is a difference between being given the power to carry out transactions for someone else's bank account and having a joint bank account. In the latter case you have equal claim on the funds to do with as you wish. e.g. Part of any such funds would count as your assets if you ever needed to claim means tested benefits and you would be financially linked by credit reference agencies.

Only with Lasting Power Of Attorney would you be entitled to continue to operate any accounts in the event that your father's lost capacity. As an attorney any transactions performed have to be solely for the benefit of the donor. LPA ceases on the death of the donor.

After a death it is the executors that have to clear up. So get things as well organised as possible now and ensure that you are named as (one of the?) executors in your father's will.

xylophone

The father might have provided all the funds in the account but be happy to allow the daughter to access them as she wishes for his or her own benefit.

On the other hand, there might be a situation analagous to that described here (except that no interest is now deducted at source)


https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem9946

where the father has provided the funds and is the beneficial owner of the capital and interest arising and the arrangement is for his convenience.

Re IHT http://www.accountingweb.co.uk/community/blogs/pd-tax/inheritance-tax-joint-bank-accounts

https://www.gov.uk/tax-property-money-shares-you-inherit/joint-property-shares-bank-accounts

On death, under normal banking practice, the account would fall under the sole ownership and control of the surviving joint owner (and anybody setting up a joint account should be aware of this - the money in the account cannot pass by will) but for IHT purposes, HMRC would look to the source of the money in the account and would seek to tax it accordingly.

cheesetoast

If you have a joint account, when he passes away, you'll become sole owner of the account.

If you're third party signatory, when he passes away, the account freezes, and you cease to be able to sign on it, because it has no living account holder.

If you get Power of Attorney, you can sign on all his accounts while he is living, but as soon as he passes away, that authority ends.

To be able to deal with his accounts once he goes, you would need to be named in his will as the executor (unless the amounts held were small and each bank's policy allowed you to deal with it as next of kin without getting probate).

Katiehound

I had POA on my mother's account for some years and when she died I was the sole executor so I carried on with the bank closing everything after probate. Of course account was frozen at her death (except for funeral payment) but it was easy to deal with as I had had sole admin of the a/c.
This is some years ago, as I recall any cheques that she needed were signed by her whilst I dealt with telephone banking. Of course the situation may be different these days.

pmduk

I can't add much to the above, except well done for facing up to this. So many people wait til it's too late

mum2one

I lost my dad 12 days ago, although my mum is with us she doesn't really deal with money, although in the will mum is executor, within the will there was comment related to xx (me) is to be executor in case wife doesn't cope.

I've dealt with the bank accounts, with his main account that was joint names (with mum) so the account stays active, his own account have been closed.

...
Previous to this (he passed with cancer, health scare in 2014, 1st diagnosed with cancer), what we did then, not just with banks / credit cards but also council tax, house ins - basically everything... I had my name put onto the account as a contact and that I would discuss the account. (which has been a godsend).

...
What were doing is going throu all accounts and double checking that I am in the background, my mum has suggested we go for a joint account for bills (with my credit rating it would bounce for England) so I have used one of her other accounts as the bill account and set up a link from mine to pay in.

I'm sorry about your mum, hope your going on ok xxx

iansp

Part of the reason I don't want to be on joint accounts is that my dad has a few high-interest saving accounts.

I have my own ISAs, and my own tax setup and I think it could get quite complicated.