Investing parents money from house sale.

Winchmore_Hill_Shot

My parents are both in a care home.  They are both in their 90s, mum has dementia and dad has virtually no mobility and is increasingly confused.  In order to pay for the fees and to avoid the house being empty for too long (it has already been a year), we are just beginning the process of selling their house which is likely to raise £500k+.  Home fees are £16k per month.

I am looking for advice as to what to do with the proceeds of the sale.  I know that both my parents would like me to use the money as wisely as possible to maximise the inheritance once they are both gone.  They still have about £200k in various bank accounts.

Thank you in advance for any suggestions.

Keep_pedalling

Assuming you have power of attorney for them the you have to manage the money solely in their best interests so investing is not an option. The best you can do is earn as much interest as you can. I would split the money into pots to cover the next few years. One pot of instant access for the coming year, one year fixed for the next ect. 

You don’t say how much income they have but they a minimum of 4 years self funding if they both live that long. Do they both claim attendance allowance?

tetrarch

You are not allowed to "maximise your inheritance". 

I assume that you have an LPA that gives you the rights to access their cash, but you must act in your parents' best interests - not yours - even if they are the wishes of your parents

https://blackstonesolicitorsltd.co.uk/category/blog/understanding-best-interests-in-the-context-of-lpas/

"What Does “Best Interests” Mean?

The concept of “best interests” is a legal principle that requires decision-makers to act in the best interests of the person they represent. In the context of LPAs, this means that your attorney must make decisions that are in your best interests, even if they do not align with your expressed wishes."

You, I and your parents when they had capacity may not agree with thie but it is the law 

Regards

Tet

Brie

At £16k a month for the care home(s) I would think that you might end up with enough money to fund them for about 4 years.  Given that they are already in the 90s that may be sufficient.  Or the money might run out.  

But yes some needs to be accessible and some can be locked away for 1 year, 2 years to get higher rates in possible.  Maybe some could go into premium bonds on the off chance that there's enough to keep them comfortable past 100.  

Best of luck with this - I know it must be a very challenging time for everyone in your family.

Albermarle

Even if you were 'allowed' to invest the money, the normal advice is to only invest money that is not needed for some years, so would not apply in this case anyway. 
The reason is that normally in the long term investing ( sensibly) will produce a better return than saving. However in the shorter term ( 5 years) it could move up and down quite significantly.

badmemory

Actually maximising the inheritance could achieve what the elderly people require.  Providing there is enough available to finance the care homes when required I cannot see a problem.  I had my mother in fixed terms of 6 , 12 & 18 months at the begining.  Couldn't use S&S as my sister, joint POA would not agree.  Make sure you claim attendance allowance as her care home manager told us almost everybody in a care home is entitled to the full rate.

Bobziz

This may help: https://www.gov.uk/guidance/investing-for-someone-as-their-attorney-or-deputy

Savings accounts and premium bonds are likely to be the only appropriate option.

Winchmore_Hill_Shot

Thanks everyone, really helpful.  I probably wasn't overly clear in what I was asking.  Ultimately, it is about ensuring that we use the money well to ensure to ensure that we can fund the care home for as long as possible.  As far as we are concerned, anything left after that is a bonus.  I had assumed it would be a mix of fixed term bonds rather than investments (both were too risk averse for that).  Dad is already maxed out on PBs.

The amount of money we are talking about here is way beyond my experience.  Given the £85k protection limit, I assume it is worth spreading the money across different banks?  Does anyone know how easy it is to set up such accounts when working with a PoA?  Up until now, some financial institutions have been far easier to work with than others.

Bigwheels1111

NS&I will give a lower rate, but its Gov based so the whole amount will be covered..

There have been many threads on here about this, can find them at the moment, people listing who take POA in the case.

Keep_pedalling

Assuming the house was owned jointly the proceeds of the sale you are going to split between them 50/50 and I would suggest you need an seperate account for each of the next 4 years. One instant access each for the next 12 months then 3 x longer term accounts. Those could all be held with different institutions.

Do your parents both have wills in place? If so are they the main beneficiaries of each other’s wills? 

LHW99

Have you considered speaking to an IFA from SOLLA

https://societyoflaterlifeadvisers.co.uk/