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Elderly relative asking for advice

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artyboy
artyboy Posts: 1,071 Forumite
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edited 13 June 2023 at 8:54AM in Savings & investments
Would appreciate some pointers on this one... situation is that I have an >75yo single relative that has amassed a near £1m pot of savings and investments. Add to that some property and their net worth is probably closer to £1.5m. They live a frugal lifestyle and show no signs of changing that, so the pension they get is 'enough' for them without ever dipping into their pot.

They have no will and have previously been resistant to having one on the basis that they'd only want the estate distributed along the same lines as intestacy rules anyway.

As the 'financially savvy' one of the family, they've now approached me asking for advice on how best to manage their affairs. Obviously I won't be giving 'advice' but need to at least help them marshal their own thoughts. Optimising their money is (relatively) the easy part. Figuring out what they are ultimately going to do with it is the hard part. 

From a slightly selfish perspective, I also have a feeling things will be left to me to administer when they ultimately die. So I'd rather it wasn't too much of a headache. 

So questions:

1) Will - how do I persuade them that getting one is an important first step? My thought is that choosing executor(s) is the kicker here, because there are siblings that are not entirely up to the job but would nonetheless be able to apply for letters of administration if they wanted.
2) My suggestion that they go out and enjoy life by spending some/all of it will likely fall on deaf ears, so assuming they won't do so, are there at least ways to optimise/mitigate the inevitable IHT bill? Gifting (relatives or charities) obviously... 

I'm sure this can't be an uncommon scenario - borderline Silent Generation/Boomer people that were brought up very frugally but have been able to amass relative wealth (this person was a fairly junior civil servant all their life, so frankly what they have done is astonishing). Conflicted now between the alien concept of spending their money, and the horror of the prospect that the state will eventually take a big bite out of it. 

So I'd especially appreciate comments from anyone else that's seen this in their families. And what questions they asked or suggestions they made...

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  • DiamondLil
    DiamondLil Posts: 673 Forumite
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    I can't offer any thoughts but want to thank you for such a thoughtful, insightful post. Good luck with your efforts to sort things for your relative.
  • Tucosalamanca
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    I'm in a very similar situation, although my 75yr old relative has a far smaller pot (but enough to be in the realms of cgt).

    I have encouraged them to spend it.
    Buy a new bigger TV because it would enhance their life, do all the home improvements they would like, don't be afraid to take taxis (they no longer drive and walk/bus everywhere), pay for private medical care, pamper themselves, be generous to people around them (because they could see it benefiting their loved ones, who are at the time in their lives where any contributions would be very helpful). They always find an excuse not to holiday.

    I've gone over finances. Shown them what they have, how much it earns, their income, how much they could spend each year for the rest of their lives and so on.

    I've shown the benefits of spending / gifting now versus the consequences of doing nothing. I've reassured them that it's virtually impossible for them to run out of money.

    They have asked for advice over a number of years but seldom act on it.
    They choose inaction rather than taking charge or delegating.

    I understand that they have a will but they have no LPAs in place.
    I've encouraged a visit to the solicitors for years and often give little reminders but it's always on the 'to do list'. Short of booking a solicitors appointment and physically driving them there, I can't do anymore.
    They are in relatively good health and have full control of their faculties. I don't think it's proper that I push them any further.

    I don't know if it's not trusting anyone, if it's fear of dying and unable to talk about it or fear of losing everything.
    It could be that they feel keeping wealth gives them some power over loved ones (and they don't want to lose it).
    It could even be that they're unwilling to part with previous inheritances, for whatever reasons.

    I do know that as the 'responsible one' at some point I'll be dealing with the consequences.

    I can't offer any advice but can empathise with your situation.

    Wills are important but not essential. Planning to avoid CGT is a good idea but ultimately it's only money

    I'd say the LPA's are the most pressing issue. If something happens and they really need help, LPAs will make life so much easier.

    I hope it works out for you and also look forward to other people's replies.
  • mebu60
    mebu60 Posts: 1,038 Forumite
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    Never easy. Maybe start with LPAs as they could prove essential further down the line. You could offer to do those online (£82 x 4 DIY). Then maybe suggest will from the perspective of naming executor(s). If and when that falls in your lap I've found it works well to draft the bequests first in layman's terms before getting it 'legalised'. 
    Sow the seed on £3k pa (plus previous year if unused) gift allowance plus the 7 year rule.
    Good luck! 
  • redux
    redux Posts: 22,976 Forumite
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    edited 13 June 2023 at 11:57AM
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    I think the angles to consider are reduction of inheritance tax, possibly by making gifts of part of the estate while still alive, but still keeping enough to get by on, and that maybe in conjunction with use of trusts

    I'm not an expert, but I'll draft something to post later 
  • Tucosalamanca
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    katejo said:
    On a very minor point in this text, I go by public transport or walk since I actually dislike taking cabs so do it as little as possible. While still fit and well, I will carry on that way. I could easily afford an occasional cab but really don't want to.
    My relative is the same and I support them. Public transport is a good way to still be around people and I encourage that.

    There was an incident recently where they put themselves into a risky situation travelling late at night by bus and having to walk half mile or so through unlit footpaths to get home. Their journey started right next to a taxi rank. It would have cost around £30 and have taken 15min. This isn't a one-off, but we are going off-topic so I won't continue....
  • Keep_pedalling
    Keep_pedalling Posts: 17,234 Forumite
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    They really do need a will, and your point about appointing executors is the one to hammer home. Even more important is that they should put LPAs for welfare and finance  in place as a matter of urgency. Being mentally incapacitated though accident or illness is going to cause you a lot more issues than them dying intestate.

    With such a large estate they really should be taking professional advice from an IFA.
  • xylophone
    xylophone Posts: 44,867 Forumite
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    I would strongly suggest that you sit down quietly with your relative and discuss his financial situation and his plans for the future.

    If he is agreeable, ask him to give you details of his position.

    Ask if he is entirely happy with his home or if there are improvements or alterations that would "future proof" the property and make it comfortable should he become less able as the years advance.

    Otherwise, would he wish to consider a house move.

    Is there any major purchase that he would like to make?

    His estate is large and as there appears to be no child to inherit his house, the IHT will be high.

    He might wish to consider making gifts now - if so, he should keep a careful record for the sake of those who will administer his estate.

    Check on local solicitors and ask whether he would consider making an appointment with a view to making a will and naming his executors.

    This is really important if those left behind to cope are not financially savvy.

    He could name the solicitors as default exors  if necessary.
  • Mrs_Z
    Mrs_Z Posts: 1,111 Forumite
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    Could you start with getting the LPA in place?  This could then be followed by a will.  You can also get someone to come to the house to do both. What worked for late friend of mine, is that I offered to a) find a suitable professional to do both and b) then booked the date/time suitable for both parties, and then they sorted out the rest between them. Best money ever spent in my view.
    If the person is frugal, it is probably impossible to get them to change their ways - I know a few! 
    I would however try from a different angle in that, to highlight what the inheritance tax bill would be if they do nothing, and in order to reduce that, get them to gift away money during their lifetime. They may prefer to give some money away rather than it going to the Crown.
     This way, they would get the joy seeing how their gift makes a difference to someone of their choosing and be secure in the knowledge that the money has gone to a person/charity that is close to their heart.
  • thegreenone
    thegreenone Posts: 1,072 Forumite
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    My late Mum's solicitor did a home visit when she wanted to amend her Will and start LPA.  Could you find out if any locally offer this service?  It might put your relative 'on the spot'............ but they may find being in their own surroundings more comfortable.
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