Making the most of house sale capital to pay care home fees

handyandy1

Long story short - 94yr old Father unable to cope at home following the loss of his wife. He is in reasonable physical health for his age but showing signs of dementia. We have found a lovely care home where he is very happy but inevitably it needs to be funded by the capital from the sale of his house which we fully accept. The sale completed last week and I (as an attorney) am now in possession of a cheque equivalent to the average price of a three bed property in Sussex. Now I see this as time rather than money and I want to give him the most time with the funds available.  I need to drip feed 6k per month to the care home so I will need easy access to a proportion of the funds but how do I make the most of the remainder? Should I see a financial advisor or the bank manager or are there any no-risk schemes that are aimed at this situation? 
I would welcome any input from anyone who has experience of a similar situation….

Brie

You could simply split it into a number of accounts in different institutions that happen to be offering high interest with each with a standing order set up into a central account from where the home fees are paid.  Maybe dump a bit into premium bonds on the off chance - they're fairly quickly available should the other accounts deplete sufficiently.  

I'm sure that there should be something that would mark these as Dad's funds rather than yours - whether that's to make the accounts joint (not an issues with PBs - I set up an account for my OH without his assistance at all) or whether you have to label them as "in trust for Dad".  The unfortunate thing with accounts these days is proving identity and if Dad isn't able to verify anything sufficiently to a bank manager then it may be difficult.  If however Dad has good days and you take him for an appointment in a bank early in the day (dementia sufferers tend to "sundown" later in the day and show greater confusion) then it might be ok to set things up joint or with him granting you third party authority to operate the account fully on his behalf.  

Grumpy_chap

handyandy1 said:

94yr old Father unable to cope at home signs of dementia.
cheque equivalent to the average price of a three bed property in Sussex.
6k per month to the care home

IMO, a simple solution is going to be best here.

I don't know why the cagey indication of capital available - is this "three bed property in Sussex" a >£million Brighton seafront pent-house or a dilapidated <£50k park home in Hastings?
This makes a big difference to how the capital should be managed.

Anyway, £6k per month so £72k per year.
I don't wish to be insensitive, but how many years do you realistically think he has?
If there is £500k from the house sale, that is likely to see him out in all probability and a simple interest bearing but easy access account would likely be the best approach.

FishInGlass

As attorney for my mother who is in a care home but with her house still unsold. I am in a similar but slightly different situation. I pay her care home fees at present from her Nat West bank account as she still has some capital.

If your father has a bank account for which you have LPA it should be possible to transfer the money there in the first instance. I would then look at potentially saving accounts with providers who are LPA friendly for some of the money that you don't need short term for the fees. You may need either to get a registration access code on line for this or possibly email them the completed LPA.

I have not opened up any new accounts for my mother so I have no experience of that. However I have found the registration process very variable depending on the financial institution, but have succeeded with all of them eventually.

Keep_pedalling

I would split it into a number of pots. Enough in an easy access account to cover the coming year, another lump in a 1 year fixed bond and another in a 2 year bond and so on.

You don’t need a FA as you will be looking at cash only not long term investments. 

Bigwheels1111

Sorry Im not trying to be mean for eg.

But how is gaining interest on the funds benefitting said parent in a home.

Does it not just benefit the tax man and govenment.

Only asking as might be in this position with my Dad.

elsien

JamesRobinson48 said:

handyandy1 said:

Long story short - 94yr old Father unable to cope at home following the loss of his wife. He is in reasonable physical health for his age but showing signs of dementia. We have found a lovely care home where he is very happy but inevitably it needs to be funded by the capital from the sale of his house which we fully accept. The sale completed last week and I (as an attorney) am now in possession of a cheque equivalent to the average price of a three bed property in Sussex. Now I see this as time rather than money and I want to give him the most time with the funds available.  I need to drip feed 6k per month to the care home so I will need easy access to a proportion of the funds but how do I make the most of the remainder? Should I see a financial advisor or the bank manager or are there any no-risk schemes that are aimed at this situation? 
I would welcome any input from anyone who has experience of a similar situation….

A cheque?  Are you serious?  Why wasn't the money paid electronically on completion day, by your conveyancing solicitor, into Father's bank current account?

Does it really matter, as long as they have got the money?

badmemory

Just a reminder to look out for the £85k maximum protected for each bank.

Keep_pedalling

Bigwheels1111 said:

Sorry Im not trying to be mean for eg.

But how is gaining interest on the funds benefitting said parent in a home.

Does it not just benefit the tax man and govenment.

Only asking as might be in this position with my Dad.

Strange reply, any interest earned obviously extends the period the OPs father can self fund, so yes it is in the interest of the father to maximise income on his capital. 

handyandy1

Bigwheels1111 said:

Sorry Im not trying to be mean for eg.

But how is gaining interest on the funds benefitting said parent in a home.

Does it not just benefit the tax man and govenment.

Only asking as might be in this position with my Dad.

As stated, it's about the time we can keep him there before we reach the upper capital limit

edit - ↑ beaten to it by Keep_pedalling !!

JamesRobinson48

I am in a very similar position with my father, whose house I sold under POA in 2021.  Like you, that money is funding my Dad's care home fees.

I have throughout kept all Dad's money in bank or building society accounts opened in his own name, although under my control as attorney. (Not in any account in my own name). Given the large amount involved, I felt this could make it easier in terms of HMRC, bank T&Cs, and my father's best interests.  What if I fall under a bus before my father passes?  What if HMRC taxes me (instead of my father) on the interest income?  What if the Office of the Public Guardian suspects me of abusing my position as attorney by taking Dad's money? And what if a bank or building society, observing the large £ amount, draws my attention to the bit in the account T&Cs where I declared that this is my own money and not held as attorney/trustee/executor for somebody else?

I found it a simple matter (although time-consuming at first) to visit banks and building societies local to me, where I am already a customer, and open POA accounts in my father's name and under my control as attorney.  So the money is spread between one bank (including my father's original current account) and five building societies, plus NS&I. It all works fine, with minimal ongoing work, and I feel my father's money is very safe. Plus if and when anything happens to me and/or Dad, it should be straightforward for an executor or another attorney to pick up without confusion as to what money belongs to whom.