Lack of Capacity

jsh99

Sorry - one thing I am not clear on - when investing my half what do I need to do? Presumably I can't put it in my name, or my brothers name. So are there special trust accounts I need to setup and is that a solicitor or the tax accountant? I assume my brothers half can just go in his name and as I have LPA I can withdraw as needed to pay his bills?

poseidon1

The bank account and investment account designation will be Trustee of ....... ( your mother's name ) Will Trust.

Once the property has been sold, your 1st challenge will be to find a bank that will allow you to open a trustee account, since the high street banks have pretty much abandoned this market.

Professionals in the trust administration sector compiled a list of banks and building societies currently active in the market in the discussion thread below -

https://trustsdiscussionforum.co.uk/t/list-of-organisations-that-offer-accounts-for-trusts/26152

As for your brother's funds, yes this will be administered via his bank account over which you hold his finance LPA.

jsh99

https://forums.moneysavingexpert.com/discussion/comment/82079862#Comment_82079862

OK brothers half I understand - and I could invest some of it to get interest for a while till it's needed to pay for his care. Just use his name and use my LPA to do all that.

But for the investment account for my half if I get NSI guaranteed income bonds that you suggested might be a reasonable way to invest needs to be called Trustee of ....... ( your mother's name ) Will Trust.

But NSI is not in the list of banks.

I also see they have a max term of 5 years - I can just re invest at the end of each term but what if my brother should die part way through the term - I just close because the trust no longer exists and take the penalty whatever that is? Presumably there is no growth on these bonds - just the interest paid to my brother so the initial investment never grows? (which will mitigate CGT but might not be great over a long period of time)

Sorry - should I also be worrying about the large amount of money in one place ie >120,000?

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82079904#Comment_82079904

The list was more about banking arrangements rather than savings and investing. You will need a trustee bank account with a checkbook facility to access NSI bonds since they only accept trustee deposits by cheque - see application form below -

https://www.nsandi.com/files/asset/pdf/guaranteed-income-bonds-application-form-trustee.pdf

Unlike the banks all NSI accounts have an unlimited government gurantee so you can invest up to the maximum allowed in NSI accounts with full confidence you are protected.

You can elect for the monthly interest to be mandated direct to brother's personal bank account. By doing so this helps ease your trust tax compliance burden since HMRC allows that income to be reported direct on your brother's personal tax return ( with the benefit of his personal allowances), rather than taxed on the trust at 20% ( soon to 22% next year).

You will still have to submit a formal trustee SA900 tax return indicating the trust income has been mandated, but HMRC will likely suspend the need for such returns after a couple of years or so when its clear there is no annual tax for the trust to declare.

You are correct, this is just an interest bearing product with no growth opportunities.

If you want some of the trust fund to attract the possibility of growth that will have to be invested elsewhere in products exposing you to the equity markets. However, depending on how much you wish to invest in that area you may struggle to find a wealth manager to take on this specialist trust investment brief. The wealth manager would require you to put in place a trust investment policy document setting out the investment brief along the lines of the following template

https://library.standardlife.co.uk/iht18.pdf

jsh99

https://forums.moneysavingexpert.com/discussion/comment/82080018#Comment_82080018

Thank you - this is VERY helpful. It's all so very complicated to someone who has no dealings with this before. No one warns you what happens when you are left to sort things out after your parents pass!

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82082425#Comment_82082425

Indeed, once a life interest trust transitions from passive occupation of the home to investing of property proceeds to produce a lifetime income, matters do become quite complicated in terms of access to appropriate services, unfamiliar accounting and tax compliance procedures and of course where and how to invest the trust fund itself.

For very substantial 6 figure trust funds, professional help ( at a cost ) is at hand, but for far more modest trust funds its a steep learning curve for the DIY trustee.

jsh99

https://forums.moneysavingexpert.com/discussion/comment/82082450#Comment_82082450

I am actually wondering if now is the time to give up my LPA and hand over to the alternative attorneys. It is two partners at a solicitors _ I know they will charge - it just might be better for my sanity!

jsh99

Just as a follow up - I have been told I can't have a copy of the capacity report. I find this strange as I have welfare LPA as well as finance and I am his only next of kin. What if someone queries why I am acting the way I am if they speak to my brother and he says he wants something different?

They have given me the SS persons contact details and said for selling the property I can get the solicitor to contact them. I guess this will have to surfice!

''I have spoken with my senior and we cannot share the MCA report due to sensitivity. The solicitor can contact my colleague ———-, who undertook the assessment.''

To add - I have just Googled it and that says I have a legal right to see the MCA as I have LPA. Can anyone confirm if this is true?

''Under Chapter 16 of the Mental Capacity Act 2005 Code of Practice, health and social care professionals must cooperate with registered attorneys and share relevant information.''

elsien

With regards to your brother saying something different, that’s not unusual where there are capacity issues. Your role is to involve him as much as possible and take his views into account. Many people will say they don’t want their houses sold pay for care particularly if they are insistent they want to return home but can’t realistically do so. No one is going to be arguing though that it’s in his best interests for his care home bills not to be paid.

There isn’t a clear legal right to the assessment because the MCA refers to relevant documentation, and although there is guidance from the OPG about a power of attorney accessing medical records there isn’t similar guidance for local authorities so this hinges is on what is considered to be relevant and necessary for best interests in the circumstances

I would argue though that you do have a case in order to be able to carry out your role effectively as the power of attorney because you may need the capacity assessment for other things not just for the solicitor to sell the house. Also, if you wanted to query the capacity assessment (which you don’t, but just as a general point) you need to be able to see what it says in order to do that. The person has the right to see their own capacity assessment and you are acting as the person.

So I would suggest moving the discussion away from sensitivity and back to querying the legal basis on which they are withholding it and the potential impact on your role as power-of-attorney. And although the OPG guidance is records you could quote that an example. I suspect it may be to do with GDPR and whether third-parties such as the solicitor need to see the full assessment. A compromise could be a simple letter from them confirming lack of capacity for you to show third parties rather than them having to contact the local authority each time.

Ultimate route to query if would be a formal complaint but it’s best to address it informally if you can.

ETA the code of practice is a little out of date but it is available online to download free and if you are quoting it to the local authority you are probably best highlighting the relevant bits rather than the chapter as a whole.

MarzipanCrumble

It might be worth contacting the UK Information Commissioner's Office to ask advice as social services may quote GDPR (General Data Protection Regulations) as their legal basis for witholding sensitive data.

https://ico.org.uk/