LPOA and expenses

maisie1234

Hello,


My father is now in a care home at his request and his house has been sold. He has plenty of money to fund the home (well over £1 m). He has no outgoings now bar the care home fees at £70k per year. The money is invested.


His income is approx. £30k which includes state and private pensions plus Attendance Allowance. His finances were in a real mess, money all over the place, a number of bank accounts etc but I have sorted this all out now. He has a will leaving his estate to his three children equally and we are executors. There are also some gifts to specific friends as well. I am the only sibling living in the UK and I am undertaking the overall care of his finances and his health and well being. I have LPOA for both health and finance. His previous house was a hoarders house and cost nearly £10k to clear.


I have with his permission given out £3k per year plus a few £250 gifts and made a record of this. My father wanted to pay me for the work I am doing on the estate but I refused. It doesn't sound right! He did suggest that he pay for my petrol costs as I don't live nearby and for the last few months I have kept receipts. I tend to fill up 3 times a month with him paying 2 of those costs. Would HMRC be interested in very detailed records of journeys etc (which I haven't kept!) I am not charging HMRC 45p per mile.


I also funded from his account my sister to come over and help clear the house, sort out the care home etc at a cost of £300. This was not a quick tidy up. Hoarders house, 15 bank and building society accounts, selling the house etc.


My question is when the time comes I know I will be the only Executor doing any of the paperwork and that I will need some help from a solicitor. Would HMRC be:


1. Interested in the petrol costs and actual journeys made etc
2. Want to see his bank account. He pays for lunch etc when we meet up. Either cash or I use his bank card (with his permission of course).
3. Is the care home fees classed as coming out of INCOME or CAPITAL? He is funding school fees for the coming year and I understand that he can do that providing it comes out of spare income.


Please be gentle with me. This has been a huge learning curve.

Keep_pedalling

You should keep accounts for acting as his attorney, but it is highly unlikely the HMRC are going to be interested in them, or want to see his back statements. I would class paying for lunch as normal expenditure and would not worry about it any further.

You should allow him to cover any expenses you had on clearing his house.

Unfortunately he cannot gift from spare income as his care home fees exceed his income, so anything over his £3000 allowance and gifts to other individuals of £250 or less would have to be declared when completing IHT400. That includes funding school fees.

maisie1234

Thank you. His finances are a real mess although much better now.


I have paid for legal advice and also the clearance of his house out his account. There is no way I can fund the costs of these items. It was £9500 to completely clear the house in order to make it ready for sale. I know... It was a big house and really bad.


Having said that we got lots of interest in it as it was completely unmodernised and it sold for well over the guide price using the sealed bids process.


House was in a very desirable part of West London. Not in a good state but the new owners have great plans for it.


Yes, I thought so regarding the school fees. I have taken the money already with the permission of my siblings and will note it on the relevant IRT form when the time comes. I will true up for my siblings as effectively I have taken some of my inheritance early. There is plenty around to fund his care and anything that he wants to buy. What a terrible waste of his life though. All that money and he was living in complete squalor

Keep_pedalling

maisie1234 wrote: »

Thank you. His finances are a real mess although much better now.


I have paid for legal advice and also the clearance of his house out his account. There is no way I can fund the costs of these items. It was £9500 to completely clear the house in order to make it ready for sale. I know... It was a big house and really bad.


Having said that we got lots of interest in it as it was completely unmodernised and it sold for well over the guide price using the sealed bids process.


House was in a very desirable part of West London. Not in a good state but the new owners have great plans for it.


Yes, I thought so regarding the school fees. I have taken the money already with the permission of my siblings and will note it on the relevant IRT form when the time comes. I will true up for my siblings as effectively I have taken some of my inheritance early. There is plenty around to fund his care and anything that he wants to buy. What a terrible waste of his life though. All that money and he was living in complete squalor

It is a sad when someone who could be living a very comfortable old age, ends up living like a Dickensian pauper, there a a couple of elderly people in my street like that.

You should not have to bare those costs they are legitimate expenses.

maisie1234

Very true. He was always secretive with money and as LPOA I now can see why. He just didn't want anyone to know how much he had. He didn't even know himself in the end although he knew his house was valuable.


The house clearance people told me that they have seen much worse than his house. People hoarding dead animals etc. I have to say that he was always lazy, couldn't be bothered to clean and tidy and then it got overwhelming so he just left it. A charity offered to assist and as long as it was free he let them do bits and pieces but it really didn't dent the piles and piles and rubbish there was. I tried to do a few tip runs but it made no difference at all.


I have another question if I may. I am in the process of consolidating his finances and have nearly finished. I will though need some professional help when he passes.


The solicitor who helped us when we needed to sort out the LPOA and his other affairs was VERY helpful. Saw us very quickly and did a great job. Could I pay them in advance of them helping me with probate to save some IRT?


I suspect probate is going to be complicated bearing in mind the large estate we are talking about but I have learnt so so much these last 6 months so I should be able to do some of it myself.

Robin9

maisie1234 wrote: »

.............................


The solicitor who helped us when we needed to sort out the LPOA and his other affairs was VERY helpful. Saw us very quickly and did a great job. Could I pay them in advance of them helping me with probate to save some IRT?

.................

The solicitor should invoice your father for their time now, not at some time in the future.

maisie1234

Sorry, do you mean they raise a bill for say £10k NOW and I pay it now? Just to be clear. My Father is alive and well at present!

getmore4less

If he is giving you permission to pay stuff that means he has not yet lost capacity and can still do what he wants.

Take expenses sometimes easier to just do mileage for travel.

Work on IHT analysis now,

If there is transferable nil rate band, upto £1m could be IHT free and dumping some now may be worth doing.

Tom99

maisie1234 wrote: »

I suspect probate is going to be complicated bearing in mind the large estate we are talking about but I have learnt so so much these last 6 months so I should be able to do some of it myself.

I would hold fire on that decision, you already seem to be doing a good job of consolidating his finances. If you appoint a solicitor who specialises in probate you will likely pay them many £1,000's but still end up doing a lot of things yourself. You already have the list of gifts in hand, presumably there are no debts so you are just left with a list and value of assets.

Robin9

maisie1234 wrote: »

Sorry, do you mean they raise a bill for say £10k NOW and I pay it now? Just to be clear. My Father is alive and well at present!

No - I am saying that the solicitor has already done work - LPOA and advice - for which they should be paid. I am surprised that the solicitor has not already billed you.

nom_de_plume

You're confusing each other here lol. OP was asking about paying for future services in advance to avoid IHT on a later bill. LPA, etc. have already been paid for.