Power of Attorney financial decisions...

Famau

I wondered if anyone might have advice for me on this issue: my mother now lives with my sister as she needs full-time care.  I have financial LPOA, and sold her house a while ago, because it needed more work than we were prepared to carrry out.  I've invested the proceeds in the best paying safe bank accounts.  My sister is rather impecunious - virtually no savings.  She has stopped work to care for my mother and just gets by (she receives carer's allowance and I send her my mother's Attendance Allowance).  Now - my question:  Her car has almost died. She can't afford a new one, but needs one to access shops, take my mother out and so on.  Can I use my mother's quite significant funds to buy her a car as it benefits my mother and effectively compensates for the constraints on my sister's ability to get out and earn an income? Or could I alternatively achieve this by paying my sister a modest "rental" income from my mother's bank account, as my mother is effectively living rent- and cost-free ?

I obviously want to help my sister but within the bounds of what is right and legal.  I know there are limitations on "gifts" but it would seem perverse that my mother could have large assets but her quality of life and that of my sister is impaired because we aren't allowed to use my mum's funds to buy a car.

An alternative is that I loan my sister enough to buy a car and that she repays me from any inheritance down the line.

Any thoughts??

JGB1955

I think it would be acceptable to buy a car (registered in your mothers name) and pay the insurance for your sister to drive it.

doingitanyway

The Office of the Public Guardian has a helpline so you could call them if you are worried, but it sounds fine to buy your sister a car so your mother can access her appointments and have a better quality of life generally.

74jax

Does your mother have any mental capacity, if so and she's happy to buy the car, there's no cap on gifts.  Just keep a note.
I had poa for mam, and social services wanted a yearly account of everything, so even if mam said could I send my brother £50 to go out for a meal for his birthday, it was all documented. 

If she doesn't have capacity i would still, personally, but the day. Document it, and she between you and your sister if your mam needs to be assessed the cost of the car will be included and will need to be sold if needed.

That's just what I would do though. 

Sea_Shell

The alternative angle could be, what would the cost of a taxi be, each time mum needed or wanted to go anywhere?

How does that compare to the cost of buying a car?

Also the car should be "modest for their needs" I would have thought.  So no Mercedes, BMW'S or Audis!! 😉

Does mum specifically need an "easy access" car, or would any standard hatchback do?

Famau

Update - just had a chat with very helpful person from OPG.  Message is essentially that I'd have to apply to Court of Protection for agreement to buy a car.  I have decided that it is probably best for me to keep everything simple with regard to LPOA, and to loan my sister the funds to buy a car myself.  She can repay me from any inheritance.  If there is none, then I am content to effectively gift her the car. 

Sea_Shell

What about paying towards running a car, like a mileage allowance?

Surely mum should contribute to this in the same way she's (you're) hopefully allowed to contribute to the shopping and other board and lodging.

Is she currently "paying her way"?

Does she still have capacity to make financial decisions?

Famau

Well, I do send from my mum's account her full attendance allowance to my sister, plus a fairly generous food allowance that covers a contribution to household costs.  I understand that anything more could be construed as a gift.  But it does seem a bit odd that her pension means that her bank balance rises month on month whereas my sister struggles to get by.  I think I need to look again at sending a little more across, but I am always aware of the need to act properly - it's just knowing what the bounds of "properly" are...! 

In terms of her capacity - well, she can hold a conversation quite well (with a few oddities...), but in terms of financial or any other decisions then no chance - she really has no interest in engaging, and relies on me to deal with this.  I have consolidated all her savings (after a lot of digging), and house sale proceeds into several accounts all just under the FSCS protection limit so everything is now easy to manage thankfully.

Thanks for the thoughts everyone...

RAS

Half the bills for the whole house plus an allowance for food, cleaning materials, toiletries, clothing (unless you buy it), treats, personal care, days out etc. And mileage.

Sea_Shell

I would have thought that paying a "full share" of the household/car running costs would be fine, if it can be documented. 

At the end of the day, who's going to complain to the OPG and trigger an audit?  As long as your mum isn't seen to have deliberately deprived herself of assets, should she have to move into care, then I can't see the LA or OPG getting involved.

Would mum's estate be anywhere near IHT limits?

Famau

Re IHT limits - it shouldn't be above, because, as we sold the house for care reasons, her estate should still be entitled to the extra £175k above the £325k limit.   And the 3 offspring are all aligned on things and in agreement that my sister should not have to struggle. 

That said, I understand that we still can't take actions that would not be in her "best interests", and that if my sister could no longer cope such that mum goes into a care home, then any use of her savings that are not defensible could leave us exposed to charges of behaving inappropriately and concealing funding - which we don't want of course.  I do have a bit of an obsession about doing the right thing - it's just that the right thing morally by my sister who has a heavy care burden isn't necessarily the right thing legally.