Investing Mums house sale proceeds

Crater · 17 February 2019 at 10:53PM

Has anyone got experience of dealing with the proceeds of a property sale as a Power of Attorney for a parent?

We have sold Mum's house to make sure there is funding for her care home needs in the coming years. We don't simply want to leave all her money in her bank - as far as I can see the advice is always to put some of it into different accounts so that it is better covered under the Financial Services Compensation Scheme. Not to mention maybe getting some interest back.

But this means moving quite large sums of money. We moved several thousand pounds to one of her own savings funds, and immediately got a Source of Funds enquiry (anti money laundering). All well and good - except that having no capacity, she can't provide the usual "bills and driving licence" ID that banks etc ask for. That apparently, they said, can be solved by a letter from her care home - also well and good. We got (after some tangles) to a point where we had provided that, and STILL got back a "if you want to do anything with this account you must provide [the things from the same list they sent us last time]. so we are almost back at square one. (Meanwhile I dont dare do anything with another bank or fund in case the same thing happens and it's frozen for weeks while we try and get the right paperwork in place.)

I believe the fund company are genuinely trying to help, but their processes just seem to be auto-functions returning boilerplate. They will talk helpfully on the phone, but the actual process seems to be completely impersonal, nobody reads the account.

How have people dealt with this situation of trying to distribute a relative's money? Is this type of enquiry inevitable wherever you go and no matter how much money you are moving? Would we have been better of sticking with a smaller amount?

Her own Bank did not complain when the funds came in, but of course the money was coming from her solicitor. If I had known about this kind of thing beforehand I would have been terrified in case her account was frozen, and we need it to pay for her care etc.

I am not against enquiries but this was a fund company where she had invested for years and the only change is that she is now in a care home. We have even been registered as a POA with them for years.

Any advice anyone? Next time we move some money, is there an average amount which doesn't set off an automatic bundle of forms and letters that go round in circles? Should I have asked them in advance?

Thanks for any advice.

xylophone · 18 February 2019 at 12:19AM

Has your mother only just lost capacity?

If so, have you registered the Power with the OPG?

You have been operating the investment account in question as PoA for a number of years?

Your mother has been living in the house you have just sold for all the time you have been operating the account as PoA?

Have you advised the DWP ( State Pension/Attendance Allowance)/HMRC/ of her change of abode?

Have you had an acknowledgement from either of these bodies?

You are able to demonstrate the source of the money to the Fund provider, you have a statement from the care home, you probably have bills from the care home in her name and you have registered the Power with the Fund provider.

Under these circumstances it would appear that the Fund provider is being unreasonable.

Make a formal complaint in writing.

Before you attempt to open any more accounts as PoA for your mother, make sure to telephone the financial provider in question to ascertain their exact requirements.

My relative manages investment and savings accounts, bank current accounts, self assessment /state and private pensions for his PoA donor - there was a large sum of money available after the sale of her home but moving this to her various accounts did nor present any difficulties.

talexuser · 18 February 2019 at 10:43AM

I sold my Mum's house when she had to go into care but it was easier because I was half owner and already had power of attorney registered. Without a power of attorney I can see how various organisations will want to know about source of monies, perhaps a signed letter from her might help if she is not mobile, or at least documentation from the house sale to prove source should be ok as far as I can see?

It was a hassle opening some accounts as POA, as above make sure their exact requirements as to identity for both of you before going to appointments. I kept around 80k in instant access highest interest savings, because around 2 years in care home fees, for safety in the event of a market crash, and kept her ISA going as POA now transferred into monthly income funds. Again explore Attendance Allowance for extra income.

Crater · 18 February 2019 at 12:22PM

HI both

Thank you, that is a help.

Yes, we have officially registered POA for some years now, and have been registered WITH the fund provider for some years too, so they have that. The DWP know. She doesn't have an active HMRC account at present as she was entirely on taxed-at-source until they scrapped it, and doesn't get that much interest anyway. IF we manage to invest her funds properly, that will probably change, but hasn't yet.

I don't think they are being unreasonable, I think they are being unintentionally unhelpful because of the way they handle their paperwork.

The advice to call people in advance and find out what they need is noted - thank you - I realise my intuition was telling me to do this, but because I didn't realise her change of address would be a problem and I wanted to move her "not needed right now" funds quickly, I didn't. (I even checked earlier with the OPG, who kindly told me - twice - that it would not be a problem as long as we had some of her OLD bills to prove where she HAD lived - the providers are not interested in that at all - they can see that from the POA document!)

My main fear is that her bank will throw a paddy when we tell them. If her account is frozen for a few weeks (which is in effect what has happened at the fund provider) it could cause all kinds of problems. I hope that won't happen, as both we and she have been with the same bank for decades, and they are personally helpful, but they have made mistakes before in registering our POA, so I can't rely on them.

I am setting up a parallel account for her with another bank, and told them the situation, and they insist they won't be asking for lots of documentation BUT I now know that the AML/Source of Funds enquiry is triggered automatically under conditions determined by the bank's central computers (whoever they are), not by what the Branch knows about you ... so I have become very cautious.

What I hoped would be quite a quick process for safety and security, is turning out to be a long and laborious process with pitfalls. People with lots of financial transactions no doubt know all this - it's the small fry like us, who don't, and get snarled up in it.

Crater · 1 March 2019 at 11:56AM

Sadly seeing a lot of stories out there about people who have had their (and frieghteningly sometimes relatives') accounts frozen, sometimes for months, because they moved a sum of money, or moved money somewhere someone (or their computers) didn't expect. Of course we are only seeing the cases where the Press have intervened. It seems there is no statutory onus on the banks to sort out things like this in a timely way. Having this happen can be a life-changing experience, not in a good way.

I'm wondering if we would be safer getting an IFA involved, even though we've been advised that they are often marginal in making a difference to your investments.

Malthusian · 1 March 2019 at 12:21PM

Shamsan wrote: »

I'm wondering if we would be safer getting an IFA involved, even though we've been advised that they are often marginal in making a difference to your investments.

It would certainly be safer as you have a statutory obligation to invest your mother's money prudently, and taking advice from an IFA covers that off.

Using an IFA is not going to result in your mother's investments growing more quickly but it will help ensure that she has the balance of investments that is right for her needs.

Banks are a pain in the bottom but if she has enough money in her current account to meet her care fees, there shouldn't be any urgency in moving funds. If they are being unnecessarily obstructive, put in a formal complaint (write to them and use the words "Formal Complaint" at the top of the letter). There is a statutory onus on all financial companies to acknowledge formal complaints promptly, and give a final response within eight weeks.

If the house proceeds are under £1 million your mother will have "temporary high balance" cover with the FSCS for six months. If you need to keep a sum larger than £85,000 in cash, you can avoid the need to spread it around numerous incompetent banks by using NS&I Income Bonds, which are guaranteed by the UK Treasury up to £1 million per person.

Crater · 8 April 2019 at 5:33PM

Malthusian wrote: »

It would certainly be safer as you have a statutory obligation to invest your mother's money prudently, and taking advice from an IFA covers that off.

Using an IFA is not going to result in your mother's investments growing more quickly but it will help ensure that she has the balance of investments that is right for her needs.

Banks are a pain in the bottom but if she has enough money in her current account to meet her care fees, there shouldn't be any urgency in moving funds. If they are being unnecessarily obstructive, put in a formal complaint (write to them and use the words "Formal Complaint" at the top of the letter). There is a statutory onus on all financial companies to acknowledge formal complaints promptly, and give a final response within eight weeks.

If the house proceeds are under £1 million your mother will have "temporary high balance" cover with the FSCS for six months. If you need to keep a sum larger than £85,000 in cash, you can avoid the need to spread it around numerous incompetent banks by using NS&I Income Bonds, which are guaranteed by the UK Treasury up to £1 million per person.

Thank you there is further helpful information there.

I would be more confident in spreading her money around for safety if I could be sure we could get it back promptly from the investment company.

Noting what one poster here said, about making sure we know exactly what their requirement are - we have tried opening an account at one of the "New young banks" with a great customer service record ... (reportedly) ... asked them exactly what they wanted, did it, and then their POA department came back to their agent and said they wanted more information in the letter (written by the care home), plus something from "List B", which means, driving licence, benefits letter, utility bills, NONE of which a very elderly person with dementia in a nursing home, ever has.

This is teaching me to take "customer service polls" with a pinch of salt. 3 weeks and they have just left us sitting after taking a massive amount of personal information about the whole family.

PS does anyone know how we can find an IFA who we can trust with this - apparently one of the wellknown organisations where you are supposed to be able to look up reliable IFAs, half of the people registered with them don't have the required qualifications.

xylophone · 8 April 2019 at 6:48PM

https://adviserbook.co.uk/

See above - when the menu for your area comes up, tick "confirmed independent" and the other specialisms you require.

Investing Mums house sale proceeds

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