Lack of Capacity

jsh99

Hi all,

Hope ok to post here, not sure it's the right board but you were all so helpful before………….

As you may remember my half brother went into nursing home from hospital after some sort of breakdown. He owned half the house due to mother getting bad advise back in the 90's.

Mother died Oct 24, Dad died Jan 23.

Mother left her half of house to me, but in an IPDI trust till he dies. I have LPA for both health and money.

Up till now brother has had savings to pay his care home fees (over 150,000 has been spent). This runs out by 1st October.

Brother always insisted he wanted to go home - but has made no effort to do this and every time I have asked shall we get you home he has said not yet, but I want to go home. I have told him if he does not go home and his money runs out he will HAVE to sell the house. He insisted he wanted to go home and that I was not to sell the house.

Social Services have been involved since I first contacted them back in December 25.

We finally got an assessment last week (over 6 months later!) and I am now told he lacks capacity around finances. They also say he must stay in a nursing home permanently and lacks capacity to decide this for himself.

I know I can ask SS, but they are so slow in responding and I want to know my options and what happens now.

Do I get something official to give to the OPG that means I can now act without his permission to sell the house? Do I get a new LPA document that no longer says I have to act with his permission? How will the house sale work - does the LPA/new document now mean I can sign without his consent?

Clearly I will not be able to sell the house before the money runs out - SS said I could do a deferred payment agreement with them - but this looks quite complicated and costs a setup fee and interest. What other options might be available to me?

Also what should I do with his money - there may be approx 450,000 in two halves to deal with. One half needs to be invested for an income - but will ultimately be mine, hopefully if I live long enough, so I'd rather it did not stagnate - but then what happens about CGT? The other half needs to pay for his care but clearly not all on one go so again needs investing but with ability to draw monthly from it. Will Ihave to do a Tax Return for him? I will of course get an IFA involved but want to be as up to speed as possible on what happens now.

Sorry for so long a post and so many questions - feeling a bit overwhelmed to be honest - I now have to clear out my family home that is a three bedroom property and has of all three of theirs belongings from over 60 years in it - the house was built on land my mother bought and was to her design. She sacrificed a lot to save it from bankruptcy and wanted to die there which she did, she told me she wanted me to live there after my half brother died but of course that's now not possible - so its going to be very hard.

kaysdee

What are the IDPI terms?
For example, in my will, there is a clause stating “The Trust Period is the period between my death and the earliest date the Life Tenant dies, or the Life Tenant stops living in the property as their main home”.

Sorry, can’t advise on the LPA side… my husband is in a care home but his LPA was activated immediately with no conditions around his capacity.

I just wonder if there is maybe some hope for you to realise your share in one of the life interest clauses.

Brie

Would you be interested/able to rent the house out? Perhaps by getting the local council to place tenants in it so they deal with everything? Of course being a landlord is a pig of a job from everything I've read so it may not be a good idea for you.

The rental income may not cover his costs but as far as I'm aware (based on our council) you can't be forced to sell your property. The council can put a charge on your brother's half which they will claim when it's eventually sold - hopefully at a good price when the market has heated up a bit.

Jude57

https://forums.moneysavingexpert.com/discussion/6677135/lack-of-capacity

I wonder if the respected and very knowledgeable member, @elsien might be able to advise? She has, I believe, professional knowledge of this issue.

jsh99

https://forums.moneysavingexpert.com/discussion/comment/82077612#Comment_82077612

no - there is now no hope of realising my share untill his death. I was advised of that both on here and by a solicitor. A DOV might have helped but there was the worry of deprivation of assets and also the doubt about his capacity to make the DOV that made that a none starter. There was a possibility of buying out the trust, where I'd need an actuary to work out what the value was - but now he lacks capacity as I understand it as I am the remainderman and the LPA I cannot sign both.

jsh99

https://forums.moneysavingexpert.com/discussion/comment/82077651#Comment_82077651

The rent will not cover the 8,000 nursing home fees - plus property has been empty for years and was lived in y three over 70's who had done nothing maintenance wise for many years. It would need new carpets etc and I doubt anyone would rent a house with a kitchen and bathroom first fitted in 1961!

Also I am an accidental landlord already - I do not relish doing it on behalf of someone else as well.

poseidon1

Looking at your past post going back to 2024 this has been a long and stressful ordeal for you.

However I believe with this official assessment of your brother's lack capacity on both financial and health matters your exsisting LPA should suffice for you to start the house sale process ASAP to release your brother's half share, and for you to invest the remain half to produce an an annual income in the IPDI trust on your brother's behalf.

No doubt @elsien will advise on any further necessary interim formalities prior to instructing an estate agent.

I covered trust investment matters with you in the thread below, but given your brother's age, probably best for you to stick with NSI guranteed income bonds when the funds become available to invest.

https://forums.moneysavingexpert.com/discussion/6571423/immediate-post-death-interest-anything-i-can-do

As for any potential capital gains tax exposure on sale , suggest you review our last exchange in the thread below especially if you are still thinking of enhancing the property value by obtaining outline planning permission as a development plot

https://forums.moneysavingexpert.com/discussion/6659878/sale-of-property-in-ipd-trust

elsien

You have power of attorney. You don’t need a new one - that is just going complicate things when he already has been assessed to lack capacity in more than one area and may mean that the power-of-attorney fails completely if you try to do a new one.

You should need proof for them to be activated in his best interests - the social worker should be able to provide it for you, and if they have assessed him to lack capacity around his finances, they can evidence that for you as well so that you can use the financial power of attorney now if it’s only set up for when he doesn’t have capacity.

So the finance power of attorney you have can be used to sell the property.
If it is not feasible to rent the house out, then really the deferred payment option is the only realistic choice. Any costs would come out of his share of the money, not yours.

If you have the finances and wanted to buy his share of the property out instead then I don’t think it’s impossible but because of the potential conflict of interest it would need a standalone application to the court of protection to make that decision and to it’s a fair price and in his best interests. You would need to take legal advice on that from a solicitor who understands the mental capacity act and court of protection processes, rather than a standard conveyancing solicitor.

Do either of the powers of attorney have limits on what you can or can’t do - you need to doublecheck that if not sure.

Sorry I can’t help on any of the tax questions, but just bear in mind when you talk about investing your brother’s share that investments work best over a five year plus period. So you also need to consider any potential losses and whether it would be in his best interests to use something less risky even if it gives a lower rate of return.

jsh99

Thanks for the replies.

So I do get official paperwork from Social Services - good. Do I need to give that to anyone? Like the OPG, I guess I need to show it to the solicitor when I sign to sell?

Given he could live into his 90s I'll have to look into the investment of my half carefully with an IFA. I assume I only pay CGT on the amount above the original investment - not all of it. And that only comes into play if its more than the value declared for probate.

I cannot afford to buy the house - I would need to buy all of it not just his half - as he is entitled to the interest on my half.

What I meant by buying out the trust was my half brother buying me out of the trust - that is when I'd need an actuary to work out what it would cost him to buy out my half so he has all the sale value minus what he gives me to give up my remainderman rights. I think that was the only option left to me now - but as I am the LPA and remainderman that causes a conflict - although we did add two partners at a solicitors to the LPA as replacements in case I got hit by a bus - so could one of them sign instead of me?

Whilst any money is invested for him I will need to do a tax return. But when I sell the house I only need to worry about CGT if we sell for more than the probate value - which I think with the current market (and being empty for 2 years) is doubtful. I no longer plan to look at planning - the new owner can do that, shame as it really is big enough plot to fit two on.

elsien

social workers is not probably not going to give you any official paperwork around capacity unless you ask for it. Get back in touch with them and ask for confirmation on writing.

jsh99

https://forums.moneysavingexpert.com/discussion/comment/82078787#Comment_82078787

OK will do - they want me to sell the house so they'll have to give me something to give to the solictor