Is borrowing money from my dementia suffering mother legal?

AimForTheSky

My mother has serious dementia; she doesn't usually know who I am any more. She still lives in her home with daily carers that she is paying for. My siblings and I control the money because she doesn't have a clue.

My brother is buying a house for which he has the funds but they are currently tied up. He would like to borrow some money from our mother's account to tide him over until he can repay it. Is that legal, or would that be considered deprivation of assets, or fraud by abuse of position.

We have no intention of keeping the money in case she needs it for a care home. In the short term she would still have enough money left for a care home, if needed, and wouldn't run out before it was repaid. Do we need to do anything to avoid being accused of these things?

Many thanks.

DullGreyGuy

AimForTheSky said:

My mother has serious dementia; she doesn't usually know who I am any more. She still lives in her home with daily carers that she is paying for. My siblings and I control the money because she doesn't have a clue.

Do you have a formal lasting power of attorney to do this?

Robin9

DullGreyGuy said:

AimForTheSky said:

My mother has serious dementia; she doesn't usually know who I am any more. She still lives in her home with daily carers that she is paying for. My siblings and I control the money because she doesn't have a clue.

Do you have a formal lasting power of attorney to do this?

Even if you do that wouldn't be a proper thing to do - you have to operate her funds/assets for her own good - "loaning" money in this way is a risk.

If you don't  - it's not your money to lend in this way.

marcia_

 If she does not gave capacity to agree then wouldn't that be theft 

HillStreetBlues

If LPA   it might be possible if a formal secure loan agreement is made
Any loan would need to against the assets which would more than cover the loan cost, also would need to be interest payable so there is a benefit to your mother.

Sea_Shell

Is this something your mum would have done, if she had capacity?  

Is there a proven history of making such loans to family?


I suggest brother waits until his funds aren't "tied up" then he can buy what he likes.

This could go wrong in so many ways.

elsien

You and your brother need to have a formal  legal mechanism for managing her finances as she no longer has capacity. If there isn’t a power-of-attorney in place, then you will have to apply to the court of protection for deputy ship. Either way, any financial decisions you make on her behalf must be in her best interest. Not in the interests of other people.

If she was in the habit of loaning large sums of money to relatives when she has capacity, and you have the legal authority to do this, and you set up a formal agreement for repayment, then they may be an argument that it could be okay. 

If any of those are missing it would flag up large safeguarding concerns. 

london21

Ethically does not seem right unless she agreed whilst she had capacity.

Otherwise could be taking advantage of her. 

Devongardener

Even if you have an LPA, the nominees can only administer your mother’s finances for HER benefit alone.  Even if it was set up as legal loan, there’s always the chance of default, putting her funds at risk.      When I had POA for my mother I kept meticulous records of everything I spent, in the event that anything was questioned when either funding her care or later dealing probate after her death.    The money belongs to your mother and no one else.

AimForTheSky

Thank you all.

Yes, if Mum had capacity she would have made a loan the same as she made a similar sized loan to my sister when she needed one.

No, we don't have lasting power of attorney. When Mum had capacity we didn't know about these things.

There's no particular point in applying to the court of protection because we can already spend her money as needed for her care. In any case, such an application would likely take years. And even if we did, surely it wouldn't solve the problem because there would be the same issue of whether taking a loan was legal.

It sounds like a legal agreement would need to be drawn up. If indeed that is possible.

Any further advice would be appreciated.

Many thanks.

MattMattMattUK

AimForTheSky said:

Thank you all.

Yes, if Mum had capacity she would have made a loan the same as she made a similar sized loan to my sister when she needed one.

No, we don't have lasting power of attorney. When Mum had capacity we didn't know about these things.

There's no particular point in applying to the court of protection because we can already spend her money as needed for her care. In any case, such an application would likely take years. And even if we did, surely it wouldn't solve the problem because there would be the same issue of whether taking a loan was legal.

It sounds like a legal agreement would need to be drawn up. If indeed that is possible.

Any further advice would be appreciated.

Many thanks.

Legally it is not that simple, whilst you might have access to her accounts to do so, you administering her affairs is not legal, you need to get POA as a matter of urgency.

A solicitor could draw up a legal agreement if you had POA, but you do not, so they will not touch it with a barge pole, you also need to think about enforcement issues etc. Realistically the best solution is for your brother to un-tie his funds.