Operating parental finances - joint account?

poppystar

Parent still capable of operating own finances. LPA exists but not been used yet. Parent wishes for child to have access to money for costs now and after death in relation to ongoing house costs that child may not otherwise be able to afford in the interim before estate settled. (aware funeral costs could be obtained direct from bank when needed - and probate costs?)


Parent aware LPA would cease on death and therefore suggests a joint account.

There is absolute trust and all transactions would be fully accounted for. No possibility of divorce or bankruptcy for either party and should child predecease parent would become sole account owner again since joint account, so no loss in event of that scenario.


Is this a good idea? Are any pit falls not thought about?


I have seen others have huge problems and obstacles in using LPA with banks - restrictions on cards, means of operating account etc. Also as mentioned both parties would currently want access and fear an LPA may limit the donor's use of account too? Is this correct.


Many thanks

Savvy_Sue

poppystar wrote: »

Parent aware LPA would cease on death and therefore suggests a joint account.

There is absolute trust and all transactions would be fully accounted for. No possibility of divorce or bankruptcy for either party and should child predecease parent would become sole account owner again since joint account, so no loss in event of that scenario.

Is this a good idea? Are any pit falls not thought about?

Pitfalls - the incapacity of either party to the joint account could lead to it being locked, so do you also have LPA?

And what if you needed to claim means-tested benefits, that money will be seen as (at least half) yours.

Having access to the funds after death shouldn't really be the driving force for this.

An alternative is to be a named signatory on an account, but without making it a joint account.

But it seems like something which doesn't need to be done when there is an LPA.

Yorkshireman99

poppystar wrote: »

Parent still capable of operating own finances. LPA exists but not been used yet. Parent wishes for child to have access to money for costs now and after death in relation to ongoing house costs that child may not otherwise be able to afford in the interim before estate settled. (aware funeral costs could be obtained direct from bank when needed - and probate costs?)


Parent aware LPA would cease on death and therefore suggests a joint account.

There is absolute trust and all transactions would be fully accounted for. No possibility of divorce or bankruptcy for either party and should child predecease parent would become sole account owner again since joint account, so no loss in event of that scenario.


Is this a good idea? Are any pit falls not thought about?


I have seen others have huge problems and obstacles in using LPA with banks - restrictions on cards, means of operating account etc. Also as mentioned both parties would currently want access and fear an LPA may limit the donor's use of account too? Is this correct.


Many thanks

If there really is complete trust then it is a very workable arrangement. My elderly mother lived with me in a jointly owned house for fifteen years and I had joint accounts with her which made all the domestic finances much easier to deal with. I kept a spreadsheet of outgoings and each month I paid my share into the joint account. She retained all her marbles to the end. We still had POAs in place but they were fortunately not needed.

Keep_pedalling

When my mother first got her LPA registered, we made an appointment with her bank (Barclays) and they set me up with a card on her account , which allowed me to use it for things like shopping and paying her bills on line. She retained her cards until she moved into care, at which point I made another appointment to inform them of the change of circumstances. Her cards were then cancelled and I now have full control of her finances.

This was all fairly simple and the bank were most helpful in setting the arrangements up. From my experience with dealing with my step father's estate, I know that the funds held in Barclays will all be released on production of the death certificate and will, so have never felt the need to set up a joint account. In addition to that none of her small estate will come to me so I really wanted to keep things totally seperate

Tom99

I had a joint account with my mother and it worked very well. Whilst she was alive I could shop for her using the joint debit card, also online banking.

After she died there were no problems in continuing to use the account for utilities and any other payments which were nesessary.

poppystar

Savvy_Sue wrote: »

Having access to the funds after death shouldn't really be the driving force for this.

Tom99 wrote: »

After she died there were no problems in continuing to use the account for utilities and any other payments which were nesessary.

It is the issue of payments necessary after death that has really prompted parent to think of this, rather than just rely on LPA.

I am not sure that banks will readily allow money to be withdrawn for utilities, house insurance, or other ongoing bills. Unless anyone has experience of this?

I have attempted to look at this on bank's website and also get an idea of what they allow in terms of LPA use e.g. is internet banking possible? both retaining cards etc, but have drawn a blank and didn't want to speak to them direct before being a bit more clued up by asking for experiences on here. [we're talking LLoyds]

The disparity in value of house and pension and savings could mean that on going payments and any essential remedial (even gardening to keep house looking occupied) or emergency work that could arise after death would result in there being no money to pay for that and the estate having to get a loan of some sort if the bank would not release funds - if that is even possible?


Many thanks for all replies

Good to know a joint account has worked for others (YM,Tom) and that it has been done before, as the suggestion initially surprised me.

Yorkshireman99

poppystar wrote: »

It is the issue of payments necessary after death that has really prompted parent to think of this, rather than just rely on LPA.

I am not sure that banks will readily allow money to be withdrawn for utilities, house insurance, or other ongoing bills. Unless anyone has experience of this?

I have attempted to look at this on bank's website and also get an idea of what they allow in terms of LPA use e.g. is internet banking possible? both retaining cards etc, but have drawn a blank and didn't want to speak to them direct before being a bit more clued up by asking for experiences on here. [we're talking LLoyds]

The disparity in value of house and pension and savings could mean that on going payments and any essential remedial (even gardening to keep house looking occupied) or emergency work that could arise after death would result in there being no money to pay for that and the estate having to get a loan of some sort if the bank would not release funds - if that is even possible?


Many thanks for all replies

Good to know a joint account has worked for others (YM,Tom) and that it has been done before, as the suggestion initially surprised me.

Different banks have different rules about access to accounts using LPOAs. In you case the your solution is fine. However you need yo check with your banks what their rules are. Asking the counter staff is pointless. Best to ask their bereavment department. Banks will usually release funds direct to the indertaker upon presentation of the death certificate and invoice. Other bills usually just have to wait until probate is granted but if you have a joint account then it is up to you if you are executor to pay them.

Margot123

Using an LPA after the donor's death can be construed as fraud as the wording on the document clearly states that the LPA ceases on death.
I had LPA and also 3rd party signatory for my Father; his bank advised it was simpler to continue using the 3rd party arrangement, and this worked well.
Under no circumstances can you use a deceased person's money from their bank account once they have passed away. How can they give you authority to do so?

Had I have lived with Dad, then I think my best option would have been to have a joint account with him.

Keep_pedalling

Lloyds like most banks have a bereavement department.

https://www.lloydsbank.com/help-guidance/for-your-next-step/bereavement/how-to-manage-the-finances/default.asp?WT.ac=FYNS_RHM1_BRWLOD

Providing the money is there they will pay the big expenses like funeral costs directly, and providing your mother's accounts contain less than £50,000 then they can be closed and the money released to the executor(s) without needing probate so there should be no undo delay in obtaining enough funds to manage her estate.

Tom99

If you have a joint account there is no problem. When the parent dies the account is automatically transfered to you alone and you just continue with any direct debits already running and use the debit card you will already have in your name for whatever you wish.

There is no need for a POA nor for probate to have been granted. Any money in the account will become yours on death of the parent.

However if the money in the account was all your parents you will still need to declare 100% of this money as an asset when you complete the IT forms.

poppystar

Margot123 wrote: »

Using an LPA after the donor's death can be construed as fraud as the wording on the document clearly states that the LPA ceases on death.

Under no circumstances can you use a deceased person's money from their bank account once they have passed away. How can they give you authority to do so?

Please read posts carefully. At no time was this ever suggested!!!!!