LPOA & Executor liabilities

rightfoot_shifter

Hi

I need advice please on the following, I have a family problem that I am trying to deal with & am concerned with my liability firstly as LPOA & secondly as executor of a will. 

Firstly with the financial LPOA, my elderly father's wife & I both have LPOA for my father. He has his own individual bank account but has become mentally incapacitated, rarely leaves the house. Bills are paid by DD, cheques are also paid. However his wife also has his debit card & PIN number & arranges for cash withdrawals. Sometimes these seem hefty to me. She does not keep records, no record even of who is withdrawing the cash. I cannot always get satisfactory answers from her on where the cash is going.

I am also an executor of my father's will. His assets may be over the HMRC threshold resulting in probate.

For the unrecorded cash withdrawals, what would be deemed an acceptable monthly withdrawal amount for sundry needs by HMRC? What would my liabilities likely to be in terms of HMRC & legal action, in either roles, should my step-mother pre-decease my father, or vice versa?

Sea_Shell

rightfoot_shifter said:

Hi

I need advice please on the following, I have a family problem that I am trying to deal with & am concerned with my liability firstly as LPOA & secondly as executor of a will. 

Firstly with the financial LPOA, my elderly father's wife & I both have LPOA for my father. He has his own individual bank account but has become mentally incapacitated, rarely leaves the house. Bills are paid by DD, cheques are also paid. However his wife also has his debit card & PIN number & arranges for cash withdrawals. Sometimes these seem hefty to me. She does not keep records, no record even of who is withdrawing the cash. I cannot always get satisfactory answers from her on where the cash is going.

I am also an executor of my father's will. His assets may be over the HMRC threshold resulting in probate.

For the unrecorded cash withdrawals, what would be deemed an acceptable monthly withdrawal amount for sundry needs by HMRC? What would my liabilities likely to be in terms of HMRC & legal action, in either roles, should my step-mother pre-decease my father, or vice versa?

What do you mean by "hefty"?    £50 a day?   £300 twice a week?   More? 

On the face of it it does sound "fishy", but unless she is prepared to tell you what the cash is being used for, then I'm not sure there is much you can do, without taking the nuclear option of petitioning to have her removed as POA.   

Have you tried to explain that as POA you really both need to be transparent as to what his cash is being used for?

Keep_pedalling

Transfers between spouses are exempt from the 7 year rule so the lack of records will not cause you a problem from an executor’s point of view as on his death they don’t form part of his estate and don’t need to be declared.

You really need to work with your step mother to get his affairs in order. If does not sound like either of you have registered the LPA with his bank and she is using his card rather than informing the bank of his incapacity. When someone has lost capacity their attorneys  should inform the bank, who will then cancel the donors own card and the attorneys get their own cards.

If your father had been contributing to household expenses from his sole account while he still had capacity then there is no reason that should not continue and unless unless you have evidence that was not the case, these are after all marital assets. 

If his account has so much money in it that it makes probate necessary then you can avoid that by moving it to alternative accounts, preferable ones that pay interest.

bobster2

If somone holds POA for another individual who has lost capacity - they should register this POA with the bank who will normally issue them with debit card in their name as POA for the account holder.

The card in the name of the account holder who has lost capacity should be cancelled.

rightfoot_shifter

Sea_Shell said:

rightfoot_shifter said:

Hi

I need advice please on the following, I have a family problem that I am trying to deal with & am concerned with my liability firstly as LPOA & secondly as executor of a will. 

Firstly with the financial LPOA, my elderly father's wife & I both have LPOA for my father. He has his own individual bank account but has become mentally incapacitated, rarely leaves the house. Bills are paid by DD, cheques are also paid. However his wife also has his debit card & PIN number & arranges for cash withdrawals. Sometimes these seem hefty to me. She does not keep records, no record even of who is withdrawing the cash. I cannot always get satisfactory answers from her on where the cash is going.

I am also an executor of my father's will. His assets may be over the HMRC threshold resulting in probate.

For the unrecorded cash withdrawals, what would be deemed an acceptable monthly withdrawal amount for sundry needs by HMRC? What would my liabilities likely to be in terms of HMRC & legal action, in either roles, should my step-mother pre-decease my father, or vice versa?

What do you mean by "hefty"?    £50 a day?   £300 twice a week?   More? 

On the face of it it does sound "fishy", but unless she is prepared to tell you what the cash is being used for, then I'm not sure there is much you can do, without taking the nuclear option of petitioning to have her removed as POA.   

Have you tried to explain that as POA you really both need to be transparent as to what his cash is being used for?

Lets just say this last month had 3 transactions totalling £500. I have indeed tried to explain the transparency to her.

rightfoot_shifter

Keep_pedalling said:

Transfers between spouses are exempt from the 7 year rule so the lack of records will not cause you a problem from an executor’s point of view as on his death they don’t form part of his estate and don’t need to be declared.

You really need to work with your step mother to get his affairs in order. If does not sound like either of you have registered the LPA with his bank and she is using his card rather than informing the bank of his incapacity. When someone has lost capacity their attorneys  should inform the bank, who will then cancel the donors own card and the attorneys get their own cards.

If your father had been contributing to household expenses from his sole account while he still had capacity then there is no reason that should not continue and unless unless you have evidence that was not the case, these are after all marital assets. 

If his account has so much money in it that it makes probate necessary then you can avoid that by moving it to alternative accounts, preferable ones that pay interest.

I have notified the bank to allow me to monitor the account transactions. Thankyou for the feedback on informing the bank, such that we each get donor cards. I didn't appreciate that was a recognised process. That should at least provide me with a degree of legal protection. And discuss the movement of funds to alternative accounts.

Sea_Shell

rightfoot_shifter said:

Sea_Shell said:

rightfoot_shifter said:

Hi

I need advice please on the following, I have a family problem that I am trying to deal with & am concerned with my liability firstly as LPOA & secondly as executor of a will. 

Firstly with the financial LPOA, my elderly father's wife & I both have LPOA for my father. He has his own individual bank account but has become mentally incapacitated, rarely leaves the house. Bills are paid by DD, cheques are also paid. However his wife also has his debit card & PIN number & arranges for cash withdrawals. Sometimes these seem hefty to me. She does not keep records, no record even of who is withdrawing the cash. I cannot always get satisfactory answers from her on where the cash is going.

I am also an executor of my father's will. His assets may be over the HMRC threshold resulting in probate.

For the unrecorded cash withdrawals, what would be deemed an acceptable monthly withdrawal amount for sundry needs by HMRC? What would my liabilities likely to be in terms of HMRC & legal action, in either roles, should my step-mother pre-decease my father, or vice versa?

What do you mean by "hefty"?    £50 a day?   £300 twice a week?   More? 

On the face of it it does sound "fishy", but unless she is prepared to tell you what the cash is being used for, then I'm not sure there is much you can do, without taking the nuclear option of petitioning to have her removed as POA.   

Have you tried to explain that as POA you really both need to be transparent as to what his cash is being used for?

Lets just say this last month had 3 transactions totalling £500. I have indeed tried to explain the transparency to her.

You say the majority of household bills paid by DD?   As that's quite a sum of cash to need, if so.   

Could she argue that she needs that cash as "spousal maintenance"?   Was he previously paying for things she needs?

Otherwise,  how is this cash being used in his best interests? 

Keep_pedalling

rightfoot_shifter said:

Sea_Shell said:

rightfoot_shifter said:

Hi

I need advice please on the following, I have a family problem that I am trying to deal with & am concerned with my liability firstly as LPOA & secondly as executor of a will. 

Firstly with the financial LPOA, my elderly father's wife & I both have LPOA for my father. He has his own individual bank account but has become mentally incapacitated, rarely leaves the house. Bills are paid by DD, cheques are also paid. However his wife also has his debit card & PIN number & arranges for cash withdrawals. Sometimes these seem hefty to me. She does not keep records, no record even of who is withdrawing the cash. I cannot always get satisfactory answers from her on where the cash is going.

I am also an executor of my father's will. His assets may be over the HMRC threshold resulting in probate.

For the unrecorded cash withdrawals, what would be deemed an acceptable monthly withdrawal amount for sundry needs by HMRC? What would my liabilities likely to be in terms of HMRC & legal action, in either roles, should my step-mother pre-decease my father, or vice versa?

What do you mean by "hefty"?    £50 a day?   £300 twice a week?   More? 

On the face of it it does sound "fishy", but unless she is prepared to tell you what the cash is being used for, then I'm not sure there is much you can do, without taking the nuclear option of petitioning to have her removed as POA.   

Have you tried to explain that as POA you really both need to be transparent as to what his cash is being used for?

Let’s just say this last month had 3 transactions totalling £500. I have indeed tried to explain the transparency to her.

That does not seem that excessive to me, we spend more than that a month on our weekly shop (there are just 2 of us) If he is the major earner then it is likely that his income has been used to provide for things like groceries.

If she was not his wife I would be more worried but in reality these are marital assets and as long as the expenditure is not massively exceeding income then I can’t see why you should be concerned. There is certainly no need for her to justify this to you or to to keep detailed records of what it is being spent on.

What I would suggest the two of you do is rearrange the finances so that all his saving (including 50% of any joint savings and any large sum in his current) is separated and kept in a number of sole accounts and that all his and her income go into a joint account which pays all the SOs and DDs plus any other expenses she has.

You can leave that household income account for her to use in any way she chooses. If there is any call on his savings then (holiday, new boiler, house adaptions or respite care ect) you agree to have more transparency on. Doing this will also be useful if in the future if a financial assessment for care is required. 

None of this will have any future on you as his executor as none of this needs to be declared or recorded for or IHT purposes. 

rightfoot_shifter

Sorry, I forgot to add that these cash withdrawals are in addition to cheques being paid out, which covers the grocery side of things. My concern is, rightly or wrongly founded, that there is no proof that I haven't been given the card & am pocketing the cash, & I feel legally exposed. In a circumstance were the step-mother were to pass prior to within 7years before my father would this invoke the 7year rule, and the account come under scrutiny for large transactions?

rightfoot_shifter

Sea_Shell said:

rightfoot_shifter said:

Sea_Shell said:

rightfoot_shifter said:

Hi

I need advice please on the following, I have a family problem that I am trying to deal with & am concerned with my liability firstly as LPOA & secondly as executor of a will. 

Firstly with the financial LPOA, my elderly father's wife & I both have LPOA for my father. He has his own individual bank account but has become mentally incapacitated, rarely leaves the house. Bills are paid by DD, cheques are also paid. However his wife also has his debit card & PIN number & arranges for cash withdrawals. Sometimes these seem hefty to me. She does not keep records, no record even of who is withdrawing the cash. I cannot always get satisfactory answers from her on where the cash is going.

I am also an executor of my father's will. His assets may be over the HMRC threshold resulting in probate.

For the unrecorded cash withdrawals, what would be deemed an acceptable monthly withdrawal amount for sundry needs by HMRC? What would my liabilities likely to be in terms of HMRC & legal action, in either roles, should my step-mother pre-decease my father, or vice versa?

What do you mean by "hefty"?    £50 a day?   £300 twice a week?   More? 

On the face of it it does sound "fishy", but unless she is prepared to tell you what the cash is being used for, then I'm not sure there is much you can do, without taking the nuclear option of petitioning to have her removed as POA.   

Have you tried to explain that as POA you really both need to be transparent as to what his cash is being used for?

Lets just say this last month had 3 transactions totalling £500. I have indeed tried to explain the transparency to her.

You say the majority of household bills paid by DD?   As that's quite a sum of cash to need, if so.   

Could she argue that she needs that cash as "spousal maintenance"?   Was he previously paying for things she needs?

Otherwise,  how is this cash being used in his best interests? 

She can rightly argue its spousal maintenance while she is still able to. After that ability has lapsed where do I stand? Am I exposed to prove that I haven't appropriated the cash?

poppystar

rightfoot_shifter said:

Sea_Shell said:

rightfoot_shifter said:

Sea_Shell said:

rightfoot_shifter said:

Hi

I need advice please on the following, I have a family problem that I am trying to deal with & am concerned with my liability firstly as LPOA & secondly as executor of a will. 

Firstly with the financial LPOA, my elderly father's wife & I both have LPOA for my father. He has his own individual bank account but has become mentally incapacitated, rarely leaves the house. Bills are paid by DD, cheques are also paid. However his wife also has his debit card & PIN number & arranges for cash withdrawals. Sometimes these seem hefty to me. She does not keep records, no record even of who is withdrawing the cash. I cannot always get satisfactory answers from her on where the cash is going.

I am also an executor of my father's will. His assets may be over the HMRC threshold resulting in probate.

For the unrecorded cash withdrawals, what would be deemed an acceptable monthly withdrawal amount for sundry needs by HMRC? What would my liabilities likely to be in terms of HMRC & legal action, in either roles, should my step-mother pre-decease my father, or vice versa?

What do you mean by "hefty"?    £50 a day?   £300 twice a week?   More? 

On the face of it it does sound "fishy", but unless she is prepared to tell you what the cash is being used for, then I'm not sure there is much you can do, without taking the nuclear option of petitioning to have her removed as POA.   

Have you tried to explain that as POA you really both need to be transparent as to what his cash is being used for?

Lets just say this last month had 3 transactions totalling £500. I have indeed tried to explain the transparency to her.

You say the majority of household bills paid by DD?   As that's quite a sum of cash to need, if so.   

Could she argue that she needs that cash as "spousal maintenance"?   Was he previously paying for things she needs?

Otherwise,  how is this cash being used in his best interests? 

She can rightly argue its spousal maintenance while she is still able to. After that ability has lapsed where do I stand? Am I exposed to prove that I haven't appropriated the cash?

By who? If you are executor then who else might claim that? Do you have a concern about a residual beneficiary raising issues? How would they know?