Family presents on behalf of Mum with Dementia deprivation of assets?

moedeeb

My mother-in-law is now in residential care suffering severe dementia. We have power of attorney and are paying 100% of her fees with her money. I know that in her healthy days she would have wanted to give birthday, Christmas and particularly wedding gifts to her grandchildren.  All told she has around 500k of assets and we’re she to die she is below the-inheritance tax threshold.  Does anyone know what would be considered reasonable in terms of the value of gifts would following inheritance tax guidance on what is appropriate e.g £1500 for a wedding be OK or could we fall fowl of deprivation of assets rules? For info the home costs about 55K per year and her income is around £25 K from investments and pensions.

Thanks

diystarter7

The 500k - approx what percent of that is in investments. The reason I ask is investments can crash.

Years ago I worked with social services and often encountered people/family with someone with dementia and I recall reading up on it- cant find that link but this one seems helpful

https://www.alzheimers.org.uk/get-support/publications-and-factsheets/dementia-together/giving-gifts-behalf-person-dementia-attorney

MovingForwards

What's reasonable is based on what she used to do herself, anything over and above could be seen as abusing the POA responsibilities.

tacpot12

As stated by MovingForwards, you can only give what she has given previously, but I don't think it would unreasonable to uprate gifts on in line with inflation as she would have done this herself.

£1,500 for a wedding gift seems quite excessive, unless there is a precedent already set by a gift made on marriage while they had capacity. I would have thought £250 would be alot less likely to raise concerns. If the grandchildren are going to inherit when she dies, there seems to be less rationale for an overly-generous gift now. Don't forget that a Deed of Variation can be used to vary her Will if all the beneficiaries agree.

Longwalker

I have POA for my mother and as it was explained to me, if mum had always given the grandkids £20 on their birthdays, slipped them a tenner when she saw them, part paid a big family pressie, then I could go on doing that, there would be no come back. Now if I decided mum wanted to give my step daughter £5k for a car , that would be questioned

It is your mothers money to be used for her

Keep_pedalling

You are in the fortunate position that her assets far exceeded what will ever be needed to cover her care costs for the rest of her life. If she made similar one off gifts to other grandchildren on their marriage there is no reason you can’t do this on her behalf for another on their wedding.

Albermarle

Keep_pedalling said:

You are in the fortunate position that her assets far exceeded what will ever be needed to cover her care costs for the rest of her life. If she made similar one off gifts to other grandchildren on their marriage there is no reason you can’t do this on her behalf for another on their wedding.

As above. Regardless of any 'rules' the chance of her ever having to need funding from the council is remote.
So in that case they will not be interested in how much she is gifting, unless it was some ridiculously large amount.

diystarter7

OP
If in doubt, consult a social worker,
If there is evidence re gifts in the past at times via bank accounts and we have done that EG to nephews/etc, "500 b/day gift" as detailed on our bank records etc, that would help you.

I had an uncle that had dementia and was in a care home for a good 7 if not 8 years cots were higher as in london and he lived a lot longer than we all anticipated - but  th income etc and cost of 55k per year, you should encounter no probs but if I was you I'd discuss with scial worker what is reasonable in your relatives circumstances for a birtday/wedding, milestone birthday, etc, etc

Keep_pedalling

MouldyOldDough said:

moedeeb said:

My mother-in-law is now in residential care suffering severe dementia. We have power of attorney and are paying 100% of her fees with her money. I know that in her healthy days she would have wanted to give birthday, Christmas and particularly wedding gifts to her grandchildren.  All told she has around 500k of assets and we’re she to die she is below the-inheritance tax threshold.  Does anyone know what would be considered reasonable in terms of the value of gifts would following inheritance tax guidance on what is appropriate e.g £1500 for a wedding be OK or could we fall fowl of deprivation of assets rules? For info the home costs about 55K per year and her income is around £25 K from investments and pensions.

Thanks

Sorry, but have I missed something - I thought that the IHT was £325k ?

If she is a widow then she will have any unused NRB from her husband’s estate, and assuming most of her assets came from the sale of her home then she also has her her residential NRB available (x2 if she is a widow) giver between £500k and £1M exemptions.

tacpot12

Keep_pedalling said:

MouldyOldDough said:

moedeeb said:

My mother-in-law is now in residential care suffering severe dementia. We have power of attorney and are paying 100% of her fees with her money. I know that in her healthy days she would have wanted to give birthday, Christmas and particularly wedding gifts to her grandchildren.  All told she has around 500k of assets and we’re she to die she is below the-inheritance tax threshold.  Does anyone know what would be considered reasonable in terms of the value of gifts would following inheritance tax guidance on what is appropriate e.g £1500 for a wedding be OK or could we fall fowl of deprivation of assets rules? For info the home costs about 55K per year and her income is around £25 K from investments and pensions.

Thanks

Sorry, but have I missed something - I thought that the IHT was £325k ?

If she is a widow then she will have any unused NRB from her husband’s estate, and assuming most of her assets came from the sale of her home then she also has her her residential NRB available (x2 if she is a widow) giver between £500k and £1M exemptions.

I don't see why this has any relevance to the OP's question. The attornyes are not allowed to give away her money in ways that were not her custom. This is the rules set by law on Power of Attorney. It has nothing to do with IHT or Depravation of Assets.

Keep_pedalling

tacpot12 said:

Keep_pedalling said:

MouldyOldDough said:

moedeeb said:

My mother-in-law is now in residential care suffering severe dementia. We have power of attorney and are paying 100% of her fees with her money. I know that in her healthy days she would have wanted to give birthday, Christmas and particularly wedding gifts to her grandchildren.  All told she has around 500k of assets and we’re she to die she is below the-inheritance tax threshold.  Does anyone know what would be considered reasonable in terms of the value of gifts would following inheritance tax guidance on what is appropriate e.g £1500 for a wedding be OK or could we fall fowl of deprivation of assets rules? For info the home costs about 55K per year and her income is around £25 K from investments and pensions.

Thanks

Sorry, but have I missed something - I thought that the IHT was £325k ?

If she is a widow then she will have any unused NRB from her husband’s estate, and assuming most of her assets came from the sale of her home then she also has her her residential NRB available (x2 if she is a widow) giver between £500k and £1M exemptions.

I don't see why this has any relevance to the OP's question. The attornyes are not allowed to give away her money in ways that were not her custom. This is the rules set by law on Power of Attorney. It has nothing to do with IHT or Depravation of Assets.

It doesn’t, I was answering the question posed by MoldyOldDough which they now seem to have deleted.