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

elsien

The wife should also start learning about how to manage bills and finances now, in case her husband becomes unable to and leaves her clueless.
It’s never too late. 83 year old parent has just started online banking, with a strict list of does and don’ts and instructions to call me if she’s not sure about anything. 
Husband could also make sure all financial information (accounts etc) is together and easily accessible just in case. 

Keep_pedalling

diystarter7 said:

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

As it is a joint gift each have given well under their NRB so no IHT would be due, it would simply use up a part of the transferable NRB.

Keep_pedalling

eskbanker said:

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....

With assets over £1M they are in the very fortunate position of being able to self fund the best of care if needed and their children / grandchildren are still going to inherit substantial amounts of money. They should also remember every £1000 spent on care reduces the IHT bill by £400. .

diystarter7

Jeremy535897 said:

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?

Thanks,  They are very lawful people and the chap has completed all self-assessments they actually helped me complete my first one. He also completes his wifes as well

Both get state pension but the house is big and old needs a lot of maintenance and heating etc, front and back gardens, painting/decor, insurance, alarm plans, window cleaning - someone doing the curtains every  years and someone around to clean the mass of blinds they have every month -  so its a lot of outgoings.

If something happens to the bloke first they want the wife to have control as they feel they have gifted what they needed to atm as bothing their children/family are relatively well off. But in a few years want to sell the rental keep a bit of cash and the rest to the children.

diystarter7

Albermarle said:

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 .

TBH, their children do not get on with each other that is part of the problem plus them living so far away.

diystarter7

Thank you all.

To be clear they were asking if was there anyone that could help them understand their position if something was to happen to the man before the woman.

They are also worried about getting repairs to the house done and ensuring paperwork is in order

I've told them to start coming off the net where possible.
Set up direct debits even for the household insurance etc even though that may work out more expensive at least it would be insured
I've told them to set up some new joint accounts with approx 85k in each rather than have the one joint account that holds 170k and the rest in premium bonds and thousands in their current account as they do not want to miss bills and he finds it easier than wasting time moving money about.

Their regular roofers/boiler/electricians etc have all retired so they use new ones all the time and not met anyone local, trusty and good value.

I told the bloke, sell the retal and use the cash to live off it as kids do not seem to bother and he told me the kids said that.

The guy is clever but old school couple, IE as per my OP, man does/did the out at work paying bills and wife worked PT and hose keeping and shopping and they both never trusted mobiles other than call people and hearing stories re scams on mobiles and the internet worries them

Thank you all for your time - lots of good info her I will call him in a few days, but his choice

re the tax and the gifts ie no tax atm, that may put their minds at rest.

Albermarle

Brie said:

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. 

Does a UK POA , work when the parent is not in UK ?

A third party mandate can be useful, but only applies to that bank account and only when the MIL has her faculties still intact.
If she were to mentally deteriorate, then you would be left with nothing as it would be too late to get LPA. Just worth being aware of that.

sheramber

Presumably the Power of Attorney has been done in the country where the mother lives.

My son lives abroad but is a joint attorney on my POA.