How to manage mums funds

Your mother is in the fortunate position that she can comfortably be able to fund her care comfortably for the rest of her life. Now is not the time for long term investments, your duty as her attorneys is to manage that money for her benefit alone, so safely should be your top priority.

By all means take advantage of the best interest rates you can get, but put the rest into the safest home possible which is NS&I.

Agree entirely with Keep pedalling's and Linton's comments above - with PoA you must look after the money in an appropriate and responsible way.

Investing in the conventional sense risks the capital and is generally only good sense long-term. You shouldn't risk the capital and, frankly, if your mother is elderly, you're not planning long-term.

So keep it all safe - which means in banks and/or NS&I.

I think I might be tempted to take out an annuity to cover the monthly expense amount. I'd then bank the maximum allowed under current bank account indemnity laws in two or three accounts that pay the highest possible interest - the bulk of the funds however I would place in the safest possible home I could find, probably NS&I.

How old is you Mum and how is her health?

To fully cover your Mum's care and expenses you probably don't need to take risks. So I would avoid equities and I'd also probably also avoid annuity product as they'd immediately reduce the capital for inheritance. I'd look at a savings bond ladder of maybe 5 years duration using something like National Savings bonds or a Gilt and high quality corporate short term bond portfolio if you want a bit more return....at the cost of a little more risk.

Have you double checked your Mum's estate's inheritance tax situation to make sure there'll be no IHT to pay.

Attorneys have the same legal duty as trustees - i.e. to manage the donor's assets as a prudent person of business would.

If you're asking this question on Internet forums, you should be taking independent advice from an IFA who is a member of SOLLA. As said above this is for your protection as much as hers.

The above advice to stick it all in cash is poor. No information is given about the donor's age or state of health so - while it is true that the average stay in a care home is about two years - it is too much of a leap to assume her life expectancy is limited. She could be a physically healthy 60 or 70-something who happens to needs some help and she could require care for many years. There is not nearly enough information to say that the attorneys should stick it all in cash.

The attorneys would potentially be in trouble if she ran out of money - which is not impossible if she lives for many years, given care fees rise by more than inflation and her costs may increase as she needs more care - and had to leave the care home due to their decision to stick it under the mattress.