Preparing for the future, elderly people where one of the couple has rarely dealt with finances

diystarter7

Hello

A couple I know in their early 70's. Both from outside the UK
Both worked and left work before retirement age.
One is very frail but both are able to make informed decisions without a problem.

One dealt with the household chores the other with running the repairs of their properties, insurance, self-assessments, etc,etc ie the financial side.

The frailer person the male is computer literate but the OH just about manages to use the moble, search the net and can not use apps etc

Most of their bills like gas/electric/council tax is via direct debit but property and car insurance is not as it works out very expensive if you stay with the same co.

They have 2 children both married and live far away and have their ow lives to lead.

The older couple gifted the children about 350k in cash 4 years ago in July I think

The couple have a rental property, mortgage free.
The couple have a property they live in that too is paid off.
They have cash savings of approx 250k
They do not have private pensions.
Property income is about 800 after the lettings agents take their cut and they tell me it is fully managed 

I've told them that selling the house worth about 350k now would incur CGT 

Who would be the best person to advise them of what to do etc.

(On one persons pension they would be hard pushed to run their main property with is a big property built 120 years ago and needs a lot of heatings and regualr maintenance and they have a gardern, window cleaners

It is complex and sad they their children don't often come and visit but they all work and they can understand that and live about 180 miles away

Their first language is not English but can read and write to a good standard, btter than mine but the lady has no finance experience other than shopping but never online and just using their cards and these are paid via DD's.

Who, what advice, the best person to hire etc and what is the approx cost

its complexed.   They are worried, not sure for what reason that if one or both had to go into care their kids/grandkids would lose out. The children/grandkids do love them as I've met them. The couple do not want to move to be near their children as they have heard too many negative stories

All advice/recommendations etc appreciated.

ps - they have two cars as well both about 3/4 years old and selling one, ie the males who is frail and the lady is too scared to drive after a recent road rage incident.

If you can point me in the right direct, I will put the best points to them.

Thanks

diystarter7

NB: Please feel free if their is a better forum for this thread.

Brie

Is this a task you would be willing to take on?  Is it something they would be willing to let you do??

They need to ensure that their affairs are in order - wills, power of attorneys for both wellbeing and finance.  POAs can be managed from a distance if everything is done online.  The children could do this without ever visiting if that's how it must go.  

Is there a friendly bank manager (hard to find these days I know) or a solicitor that could help?  I am reluctant to suggest an IFA as they will be looking to sell/deal with investment advice rather than day to day management of bank accounts.  

Ultimately if nothing is done the decision making will be taken out of their hands and their children will get no say in the matter.  

You say the man is computer literate - would it help for him to log on and visit here and get advice first hand??

Keep_pedalling

Well the first thing I would recommend ( assuming this has not already been done) is for both of them to make lasting powers of attorney for finance and health in case either becomes incapacitated in the coming years. They should also make sure their wills are in place.

As a couple with children they can leave an estate if £1M IHT free. The gifts they made will fall outside their estates providing they survive another 3 years, but if they will be still be in IHT territory after that drops out they should take professional advice with regard to IHT planning. 

diystarter7

Brie said:

Is this a task you would be willing to take on?  Is it something they would be willing to let you do??

They need to ensure that their affairs are in order - wills, power of attorneys for both wellbeing and finance.  POAs can be managed from a distance if everything is done online.  The children could do this without ever visiting if that's how it must go.  

Is there a friendly bank manager (hard to find these days I know) or a solicitor that could help?  I am reluctant to suggest an IFA as they will be looking to sell/deal with investment advice rather than day to day management of bank accounts.  

Ultimately if nothing is done the decision making will be taken out of their hands and their children will get no say in the matter.  

You say the man is computer literate - would it help for him to log on and visit here and get advice first hand??

thanks, He is frail and only used the laptops for banking, emails, etc, etc and worries about using it for anyhting else and frail.

I would not step in as I too have enough on my plate and do not want to be accused of anything

I totally agree re "IFA" hence my question's here.

NB: I can see oursevles like this when our children move away as one is considering USA and the other Australia.


The self-assessment tax returns re rental - does an accountant do those and what type of cost for a relatively straightforward one as I've never used one nor the people I am talking about.

diystarter7

Keep_pedalling said:

Well the first thing I would recommend ( assuming this has not already been done) is for both of them to make lasting powers of attorney for finance and health in case either becomes incapacitated in the coming years. They should also make sure their wills are in place.

As a couple with children they can leave an estate if £1M IHT free. The gifts they made will fall outside their estates providing they survive another 3 years, but if they will be still be in IHT territory after that drops out they should take professional advice with regard to IHT planning. 

Thanks. If one of them does go to the other side brfore the 7 year, how is the ta collected as with the give they are above the 1 mill. They gifted from join bank acounts

Who is the best person in times like this?

The lady is seriously worried re using the laptop for banking/shopping because of scams and when yo are over 70 and not used them I can see their point.


NB - even I don't trust banking apps.

Jeremy535897

My own experience of the online LPA process is that once set up, it is simple to use, but the initial process is best done in these circumstances using a solicitor. Having said that, the first documentation produced by the Office of the Public Guardian was incomplete and/or duplicated, and it was for the client to deal with it.

There will never be any tax on the gifts 4 years ago to collect, but the nil rate band of a donor will be reduced if that donor dies within seven years of making the gift.

Presumably they both receive a state pension? What have they done in the past regarding declaring the rental income and pensions, interest etc?

Albermarle

Who is the best person in times like this?

Probably one or more of their children in normal circumstances. Can the couple not ask them for help in these matters? It may well help them in future, if their parents affairs are in order and they have minimised IHT etc .

Brie

As to the long distance thing.....I'm listed on my mom's POAs and she doesn't live in the UK.  As there are 4 of us siblings the POAs specify that any 2 of us can make decisions.  This covers things in case I'm visiting or should any one of us be incapacitated.  

There's also the option of someone taking on third party authority on bank accounts.  I've got this for my MiL so it remains her account completely but I can legitimately do her banking, pay her bills for her. 

sheramber

I think  they or you need to contact the family and explain the position. The family then  take responsibility for sorting the affairs.

They can surely spare some time to help  their parents out.

At the  end of the day it is them that will have to sort things out so better to get a handle on it now.

eskbanker

diystarter7 said:

They are worried, not sure for what reason that if one or both had to go into care their kids/grandkids would lose out. 

Just to pick up on this particular point, this doesn't seem to be an unusual perception, i.e. they view their assets as future inheritance for the next generations(s) and don't see these as being a source of funding for their own care costs (if needed).  Unfortunately, nobody else is going to pay for later life care for those wealthy enough to fund it themselves, so you might gently try to explain this to them, or, better, get the family to do so - with the exception of a few grabby kids, the vast majority are keen to ensure that their parents are comfortable in their old age, even if it means 'losing out' on some inheritance....