Power of Attorney Gifts

Cubicsrube

If the gift would be for one of several children, doesn't this also trigger an issue of fairness with respect to any eventual inheritance? Assuming the will treats them equally and can't be changed now because the dad lacks capacity, then the sibling getting the gift would end up benefiting twice (assuming there are assets left on dad's death) - or being the only one to benefit (if care fees wipe out all the assets). If the dad passes within 7 years, then the gift could reduce his IHT exemption to the detriment of all beneficiaries.

I had a somewhat related situation, where my mother had been giving regular gifts out of income to one set of now-adult grandchildren for many years. After moving into a care home and seeing her savings rapidly deplete, we registered the LPA, put her house on the market and were in the process of deciding what to do with the regular gifts - recognising that, even though she had considerable assets at that point - her income vs expenditure picture had dramatically changed. My sibling and I agreed that, as her attorneys, we could no longer justify them, and from an IHT/inheritance perspective, if they continued, they would create an unfairness issue. Important to take a clear-eyed view of these things.

Spendless

It would be a No from me. I also wouldnt be assumming that aged 90+ in a care home with dementia means only there for a short while.

My grandmother with mixed dementia went into a care home a month before her 91st birthday and died 8 years later 5 weeks before her 99th.

You dont know how long his money needs to last to pay his fees.

elsien

https://forums.moneysavingexpert.com/discussion/comment/81955899#Comment_81955899

There is also an argument that with a proven history of gifting the relevant amounts and enough money to continue to do so then there would have been no issue with carrying on because it would have been both affordable and in line with your mother’s long standing wishes.
Inheritance tax is around her beneficiaries best interests, not necessarily hers.

Cubicsrube

https://forums.moneysavingexpert.com/discussion/comment/81957162#Comment_81957162

I take your point, about attorneys needing to act in the donor's interests rather than future beneficiaries'. In this case, Mum was actually involved in these conversations as she still had capacity to express her wishes, just not to understand the implications or execute banking/legal changes etc. Her wish was to "ensure things ended up fair".

In thinking about whether things would 'end up fair', I interpreted the rules around claiming exempt 'gifts out of income' to be that her actual income (pension and small amount of interest) had to exceed her outgoings (care home fees) in order to use this exemption - which they no longer did.

And also, I understood that she could not START giving new regular gifts to the other set of grandchildren now, under changed circumstances, in contemplation of IHT. (The gifts with proven history were to only one set of grandchildren, not based on preference for them, but just a continuation from when they were little and she & dad paid their pocket money; mum had simply increased and continued this as they grew up; the other grandchildren came along later and no pattern had been established for them yet).

I might have been wrong about these two interpretations, but in any case this is what left us seeing a risk of a potential unfair outcome, against mum's wishes, had she survived in her care home with the one-sided gifts continuing for a very long time. It all became moot when she died unexpectedly of an unrelated cause.

CapricornLass

I think no, too. If the LPA has been set in motion, then you have a duty to manage the money for the benefit of your dad. Naturally, you will be sorry for your sibling, but no the money is not there for their op. Stick to your guns!

One thing you might have to watch out for is your sibling constantly mithering your father for the funds, especially if they live close by and 'can drop in'.

I_Love_comps

I am a deputy for my mom. It states in the deputy hand book. That I am not allowed to give monetary gifts. Check in the paper work you had from the public guardian. Then next time someone asks for money. You can tell them that you are not allowed to give any money gifts.

Rosa_Damascena

https://forums.moneysavingexpert.com/discussion/comment/81954646#Comment_81954646

I think the sibling is TTP - wishing to cash in their inheritance early!

Having said that, I wouldn't want to be at the mercy of a NHS waiting list for something elective but debilitating. Sibling needs to make their own financial arrangements and the OP's father is not a cashpoint.

Sea_Shell

The OP says "Dad, who is in his 90’s and suffering from dementia wants to gift the money and asked me to sort it out."

Generally, IF (big if) the person wishing to gift has the capacity to make that decision, and the PoA is just being used to help facilitate their financial needs, can the (any) gift be made?

Consider an elderly parent, who doesn't use the internet, so their PoA does all their banking for them, for convenience, and they wish to make gifts. Surely the PoA is allowed to carry out their wishes?

What if they want their PoA to buy expensive champagne, or book a holiday for them...

Should the PoA get instructions in writing, or video of the instructions, to cover themselves?

sheramber

https://forums.moneysavingexpert.com/discussion/comment/81974470#Comment_81974470

If the person has capacity then he can spend his money as he wants. The attorney is only facilitating him.

Dies the attorney get written instructions as to what he does in the online banking? After all, he could be accused of mis handling the money.

the person who is subject of the thread has dementia so if he does not have capacity the situation is totally different.

If he does have capacity it is his choice what to do with his money but if the money runs out for his care then it could be considered deprivation of assets.

Rosa_Damascena

https://forums.moneysavingexpert.com/discussion/comment/81974098#Comment_81974098

Are you referring to Haman? Or is there something out there in the public domain accessible to all without cost?