Is LPA Laissez faire OK

Moonwolf

I have financial LPA for a relative in his 90s.

His money is a bit all over the place but he likes it where it is.  A block is managed by an IFA but for some reason (trust I think) he didn't tell his IFA about everything.  He has a valuable house, six figures in cash and cash ISAs, far more than I would hold in cash.  He also has a Prudential bond which he takes a flat monthly sum from, currently about 3% and a DB pension and some bits a pieces sold to him years ago by Barclays wealth managers from his bank. He hasn't done any IHT planning.

At the moment he has no cognitive issues but struggles with IT, the internet, online ordering and modern banking so I do it all for him using the LPA but I only do Admin, he makes all the decisions. 

A relative recently suggested that I have a responsibility as attorney to makes sure his money is managed better and do the IHT planning.  Personally I can't see an issue, this is the way he has always done it.  He has enough and should always have even if he needs care.  He understands and is happy with where his money is and as far as I can see most IHT planning is putting money outside his control which I don't see how that benefits him and it is a bit late.  I might be one of the people inheriting something but I prefer not to think about that, and although I am retiring soon I've just assumed in my calculations I'll inherit nothing, so I don't really care if he spends it all on care or lots goes in tax.

If it was my money I would be a little more organised and active but I'm just going with his wishes.

I keep a record of all expenditure that I organise on his behalf and there is a small what's app group where I post everything almost like a ledger.

Do I have a responsibility to do more and be more interventional?

RAS

Until such time as your relative becomes unable to make their own financial decisions, you are doing the right thing, even if you don't agree with all his decisions. Legally, they are entitled to cancel your attorneyship any time they want. 

I had the old style attorneyship over a relative's affairs. In the early days, we went to their bank and main building society and they allowed me to help manage things, but everything important had to be signed by the relative. I was able to massively reduce their DDs by comparing suppliers, and pay other bills, but when they wanted to get a better income from savings, they had to sign the paperwork. It was only when they lost capacity that I was allowed to cancel one or two expensive DDs that the donor wanted to keep because it plainly was no longer in their interest. 

And it is never OK for an attorney to engage in IHT planning. If he wants to do that, support him.

Financially, it might be worth suggesting he gets some advice on getting more for his cash and look at the bits and pieces. But does he need more money? It's up to him.

Considering how many financial institutions have merged, I would check that he doesn't have more than the £85k limit in any group that shares a licence. That's a newer risk that may not have existed when his finances were set up and needs reviewing at intervals.

elsien

Even if he loses capacity, best interests really involves managing things in the way he did himself when alive, as if you were him.

If he has been happy with his money being managed that way for donkeys years, then over ruling his wishes in the future just because he can’t argue with you anymore is not in his best interests. 

Anyway wouldn’t IHT planning be more around benefitting his beneficiaries after his death?  So really, more in their interests than in his, I would suggest.
Unless there is a really compelling reason otherwise you would just carry on managing his money in the way that you know he would do himself if he was still able to. 

It would be a bit like a health and welfare power-of-attorney completely ignoring the fact that someone has declined health interventions all their life, and agreeing to things that they know the person would hate.

Savvy_Sue

elsien said:

Even if he loses capacity, best interests really involves managing things in the way he did himself when alive, as if you were him.

If he has been happy with his money being managed that way for donkeys years, then over ruling his wishes in the future just because he can’t argue with you anymore is not in his best interests. 

I would agree with what you say, except that I think there IS an argument which says that once he loses capacity, allowing his savings to earn a pittance in interest when you could enable him to earn more would NOT be in his best interests. 

But I'd balance that with respecting any 'ethical' choices he would make, eg not investing in arms, tobacco or alcohol. 

bunnygo

if he hasn't touched the cash ISAs in ages, they will probably be earning buttons as opposed to the 4% plus they should be earning. You could suggest moves; but if you do it that will mean setting up your power of attorney with each institution concerned, a lot of work.

Don't even think about IHT planning, especially not if you are a beneficiary. And unless he lives another seven years, not much to be done anyway.

elsien

Savvy_Sue said:

elsien said:

Even if he loses capacity, best interests really involves managing things in the way he did himself when alive, as if you were him.

If he has been happy with his money being managed that way for donkeys years, then over ruling his wishes in the future just because he can’t argue with you anymore is not in his best interests. 

I would agree with what you say, except that I think there IS an argument which says that once he loses capacity, allowing his savings to earn a pittance in interest when you could enable him to earn more would NOT be in his best interests. 

But I'd balance that with respecting any 'ethical' choices he would make, eg not investing in arms, tobacco or alcohol. 

I think that depends on how much money he has. if he has enough that it's going to see him out whatever happens then I would still go with managing it in his preferred way because that is probably what he would have done himself if he'd been in a care home for physical health but still making the same financial choices.   Getting a bit more interest is of no benefit to him in those circumstances, only to those he leaves behind.

Savvy_Sue

elsien said:

Savvy_Sue said:

elsien said:

Even if he loses capacity, best interests really involves managing things in the way he did himself when alive, as if you were him.

If he has been happy with his money being managed that way for donkeys years, then over ruling his wishes in the future just because he can’t argue with you anymore is not in his best interests. 

I would agree with what you say, except that I think there IS an argument which says that once he loses capacity, allowing his savings to earn a pittance in interest when you could enable him to earn more would NOT be in his best interests. 

But I'd balance that with respecting any 'ethical' choices he would make, eg not investing in arms, tobacco or alcohol. 

I think that depends on how much money he has. if he has enough that it's going to see him out whatever happens then I would still go with managing it in his preferred way because that is probably what he would have done himself if he'd been in a care home for physical health but still making the same financial choices.   Getting a bit more interest is of no benefit to him in those circumstances, only to those he leaves behind.

Fair point. Of course predicting how long someone will survive, and with what needs, is a black art ...

Moonwolf

RAS said:

Until such time as your relative becomes unable to make their own financial decisions, you are doing the right thing, even if you don't agree with all his decisions. Legally, they are entitled to cancel your attorneyship any time they want. 

I had the old style attorneyship over a relative's affairs. In the early days, we went to their bank and main building society and they allowed me to help manage things, but everything important had to be signed by the relative. I was able to massively reduce their DDs by comparing suppliers, and pay other bills, but when they wanted to get a better income from savings, they had to sign the paperwork. It was only when they lost capacity that I was allowed to cancel one or two expensive DDs that the donor wanted to keep because it plainly was no longer in their interest. 

And it is never OK for an attorney to engage in IHT planning. If he wants to do that, support him.

Financially, it might be worth suggesting he gets some advice on getting more for his cash and look at the bits and pieces. But does he need more money? It's up to him.

Considering how many financial institutions have merged, I would check that he doesn't have more than the £85k limit in any group that shares a licence. That's a newer risk that may not have existed when his finances were set up and needs reviewing at intervals.

Thank you for this. I took on board the £85k limit and I have had a chat with him.  We do need to split out some cash as there is over £130k in various Barclays accounts.. I’m not after anything riskier or long term, he needs access as his needs change, and ease of use trumps over rates.  The question then comes is how to identify the most LPA friendly banks/building societies. Barclays are OK, I have to use the web portal, not the app and with a calculator style 2FA.  So the priority order would be 1) Not Barclays or Prudential due to the £85k limit. 2) Good support for LPAs and 3) Reasonable cash ISA and savings rates. Ideally we need to be able to set things up remotely, not in branch.  Does anyone have any good reviews?