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Complicated and probably worrying over nothing but....

(13 Posts)
Roseformeplease Tue 23-Jun-15 10:10:47

I am one of 4 sisters. Divorced parents and Dad subsequently died. Two sisters live overseas. Me and one other in the UK. Mum is an alcoholic and is now pretty housebound with various mobility issues, possible pending cancer diagnosis. She is terrible with money but lives in her own flat which she inherited from her parents. Sister S is getting divorced in Hong Kong and returning to the UK in the next month. Very messy divorce and she is bringing her children back to the UK. She has had, until recently, a lot of money (think Hedge Fund type money). Her husband is a lawyer but does not work as one and is currently unemployed, but with cash reserves.

Some years ago, Sister S lent / gave my mother a large sum of money to settle debts. She also paid for some renovations. My mother gave permission (limited power of attorney) for Sister S to deal with debts and financial affairs. Sister S laid out a sum of about £20k, some of which was, arguably, gifts. Some clearly payment of debts.

Sister S is a foul bitch which means that she cannot be reasoned with or anything. (Relevant).

She has demanded, as part of her divorce settlement, immediate repayment of all the money my Mum owes her. Mum has just a state pension, some other benefits and her flat. Sister S says the money is part of her settlement and it is to feed her children. No one disputes that my Mum owes this money although there is no legal agreement that it was a loan. There turns out to be a spreadsheet of every tiny cost, some things are just ridiculous (tiny items that would usually be gifts).

Sister S is returning to the UK and putting all her children into private school and has no plans to work.

My mother, terrified that Sister S was going to take her flat, immediately revoked the power of attorney and, in doing so, named DH and Sister J's DH (UK based) as "people she could turn to for advice."

Sister S is now repeatedly demanding DH's e-mail address, mobile number etc to "pass on to her lawyers" and to "give to the Hong Kong courts". She could easily get in touch with me/him but has refused to have any contact for some time now, although still sends really evil and unpleasant e-mails and demands.

Is she just lashing out? Do the HK courts have any jurisdiction over my mother? Can they demand the sale of her flat? Would the UK courts allow this? Can the HK courts demand anything of DH. He has agreed to nothing, signed nothing but was just named as someone my Mother (alcoholic, confused) said she could turn to for advice.

Sorry - really, really long but not sure what is / is not relevant.

There are huge underlying personal issues here and a lot of pain. However, I want to be reassured that DH will not become a target of some lawyers, a rich ex-husband or my sister when she returns to the UK.

Thanks so much

LotusLight Tue 23-Jun-15 15:48:54

Assuminf your mother has competence she can change her power of attorney - her lasting power of attorney and that will only be exercised when she loses competence so it is in a sense held in reserve. If your mother has already lost competence then the new power of attorney may not be validly made of course.
If the large sum of money your sister provided for the mother's debts the £20k? (i.e not a very large sum of money really ) or another larger sum?
How does the £20k compare with the value of the equity in your mother's flat? If your mother has say £500k equity in the flat and owes your sister £20k the simplest thing is surely to do equity release on the flat to pay the sister off provided she signs a statement to say it is in full and final settlement of all claims and that claims are then all cleared.

Your post is inconsistent. If the sister made a gift your mother does not owe her a penny. If your sister made a loan then it is loan. It is very common to have a spreadsheet with amounts on it but usually that is sent each time it is updated to the person who owes the money. Do we know if the sister sent the spreadsheet or an email each time she provided more money to her mother?

It sounds like you all think this sum is a loan. If it is jsust £20k then my idea is equity release to pay it off. If it is much more than that then it could be worth disputing whether the sum is a loan or not. I pay from my earnings 5 schools fees a year (or I did before the oldest ones left) - 4 sets will be quite a lot but it sounds like the ex husband might be paying. £20k will pay about one set of fees for one child for one year.

In the HK divorce an asset the sister has might be the sum owed by the mother so that is why it is relevant. Her husband may be wanting his 50% share of this sum which is owed.

Roseformeplease Wed 24-Jun-15 10:31:08

Sorry. To clarify. My mother has changed the power of attorney but unofficially, in handwriting (advised by Age Concern) but, in doing so, named DH and BiL as "advisors". Are they therefore liable, even though she is now managing her own affairs? It was only limited to allow my sister to deal with her creditors, not a full one. Not sure of the legal terminology.

My post is inconsistent because I am not clear. My sister claims my mother owes her 20k (a huge sum of money to her). My sister has spent that money on my mother but some of it could, reasonably, be considered gifts. There is a grey area. Where does, "I think you need a new dustbin, let me buy you one" become a gift / loan? Because my mother is a master at getting people to pay for her, this is never clear. If we are adding up, then I have spent 2-3k (on a limited public sector wage) over the past 5 years on debts etc for my Mum. If my sister is claiming "her" money back, can I claim the same, even though I had no expectations of getting it back and nor, I thought, did my sister. I am not going to do this but you see the issue.

We have looked into equity release but my Mum is young. It is a leasehold property with a limited lease left (enough to do her life) and she can't afford to extend the lease. Probably worth about 160k (needs doing up).

The e-mail spreadsheet only emerged recently and was NOT sent to my mother until a few months ago. My mother does not have, or use, a computer and it was not posted but e-mailed for us to print off and send.

The school fees are only relevant to show how desperate my sister is for the money. We are talking 3x day fees here but she seems to think my mother should cough up (how?) to help to pay.

Mumblechum1 Wed 24-Jun-15 11:22:06

A lasting power of attorney cannot simply be amended in handwriting after registration.
The correct procedure, so long as your mum has capacity, is to revoke the LPA and make a new one.

LotusLight Wed 24-Jun-15 12:03:01

Yes, exactly. And that is not very hard. She can easily do that - a new LPA.

In law as to the debt - gift - it depends what was "agreed" at the time. My daughter and I have a written loan agreement which sets out what she owes me and when it is paid back for part of the deposit on her flat so there is no doubt that is a loan. If we did not have a written agreement there still might have been a verbal agreement that it was a loan or the opposite - a gift but harder to prove.
If your mother ever paid any back by the way then that would imply all of the sums were loans.

Was anyone present in the room or were emails sent when your sister made the payments? Eg if she was abroad and sent an email 3 years ago saying here is the £1000 to add to the loan or I am giving you £1000 as an unconditional gift to help you out - that would help decide the matter.

So you might have made your payments as gifts and your sister might have said they were loans at the time and made that clear to your mother. You cannot make something later into a loan if it were given as a gift at the start. I suspect here there will be little in any emails from the relevant time - generally paperwork, emails win cases as stronger evidence than what people say now.

There seems a good chance these were gifts BUT when the first spreadsheet came did mother throw up hands in horror and email straight back saying what on earth is this these were loans or did she say noted, I accept I owe this or did she say nothing? If any of the latter two that could be a problem.

Gemauve Wed 24-Jun-15 12:12:26

Are they therefore liable, even though she is now managing her own affairs?

They never were. Attorneys are personally liable if they act fraudulently, unreasonably, etc. They are not liable for the finances of the donor, provided that their own behaviour is reasonable. They obviously cannot in any way be liable for what happened prior to their becoming attorneys. There might be some complexity between Sister S and your mother, and the attorneys might get dragged into the decision taking; they would not, however, be in any way financially liable.

Gemauve Wed 24-Jun-15 12:13:42

My mother has changed the power of attorney but unofficially, in handwriting

That's bad advice. If it's an LPOA it needs to be redrawn and re-registered. If it's some other form of POA then it needs to be revoked and reissued.

Roseformeplease Wed 24-Jun-15 14:08:06

I think I am a little unclear. Isn't a LPofA when someone fears they will become unable to manage? My mother never had this and it was never registered with the Court (I checked online). What she had was an agreement (which I have never seen) allowing my sister to deal with her bank and one or two debtors which my mother revoked in handwriting.

There is no e-mail / paper trail as my mother does not do e-mail / computers at all.

Most importantly, however, my sister's threats that DH needs to "get in touch with the HK court because they need his details" are just that, threats. He is not liable for debts / loans agreed by her with my sister just because my mother said she might, at some point in the future, seek financial advice from him. Knowing that is brilliant. Really brilliant. Thank you ladies.

I suppose I am just scared. My sister and her husband have / had huge resources and their court battle seems to be involving my mother, possible attempts to take my mother's house and also, suddenly DH is implicated because my mother said she might seek help from him and BiL.

As for the e-mailed spreadsheet. I don't know. She lives the other end of the country and has form for being flexible in her approach to the truth (alcoholic). I think the truth probably lies somewhere in the middle. Sister paid off Mum's debts = loan. Sister says, would you like a new bathroom, my treat = gift. However, all these financial transactions are on the one spreadsheet. They have stopped just short of listing birthday cards on there but it is a pretty comprehensive list of items, some of them of very low value.

Gemauve Wed 24-Jun-15 14:19:54

What she had was an agreement (which I have never seen) allowing my sister to deal with her bank and one or two debtors which my mother revoked in handwriting.

OK, that's at most a Power of Attorney (not Lasting or Enduring), at least just an instruction to the bank and those particular debtors to accept your sister's instructions. Who drew this instrument up?

The interesting part is that if it were just about the bank and the debtors, then it doesn't empower the attorney to enter into loan agreements with third parties on the donor's part. And in any event, for an attorney to lend money to the donor under a more wide-ranging PoA is a clear conflict of interest.

So it's not obvious on what basis these "loans" were made: your sister can't use a general power of attorney to borrow money on behalf of the donor from herself both as attorney and as lender, and it sounds like she has even less authority to do that under the limited attorney she had (does that limited agreement give her the authority to borrow anything from anyone?)

If your mother could be shown to have personally agreed to payments being loans, that's the ball game. But otherwise it's not obvious that your sister has a leg to stand on and the presence of the attorneyship (ie, a clear conflict of interest, at best) makes your sister's position weaker, not stronger.

Roseformeplease Wed 24-Jun-15 14:31:10

Goodness, Gemauve. I knew that someone who has POA had to act in the interests of the person they are helping, not themselves but I had not considered that my sister was not really acting in my mother's interests in lending her the money. Certainly, had she not done so, my mother would have been under pressure (which the rest of us wanted) to sell the flat and move closer to one of the UK sisters so we could help her. Certainly, the money thing has just meant that my mother has been dug into a corner that she can't easily get out of.

Nothing in the attorney about lending money / borrowing money. So, my sister, under UK law, cannot try to sell my mother's house from under her to reclaim the money? Nor can she drag DH through the HK courts to demand he sell my mother's house?

Roseformeplease Wed 24-Jun-15 14:32:07

I think the "instrument" was drawn up by HK sister's DH who is a lawyer by trade but is not practising and has never worked in the UK as one.

Gemauve Wed 24-Jun-15 17:00:46

Nothing in the attorney about lending money / borrowing money.

So did your mother sign anything agreeing to the loans? I mean, really sign, witnesses, that sort of stuff? If not, your sister can, if you're willing for the family ructions, just fuck off. What she appears to be lining up to say is "I agreed, on behalf of my mother, using this power of attorney, to borrow money from me, and I now want it back". That fails under the PoA not being strong enough, under conflict of interest, under (you claim) not acting in your mother's best interests.

So, my sister, under UK law, cannot try to sell my mother's house from under her to reclaim the money?

She'd first have to prove that your mother owed her the money. It doesn't sound like she's got even the beginnings of that.

Nor can she drag DH through the HK courts to demand he sell my mother's house?

That's just scaremongering. What business is it of the courts in Hong Kong that a UK citizen living in the UK may or may not owe some pounds sterling to another UK citizen, currently resident is the UK? And even if, by some bizarre logic, the Hong Kong courts saw it as their business, it's a civil debt that cannot be enforced without the agreement of a UK court. A Hong Kong court has no standing in this.

I think the "instrument" was drawn up by HK sister's DH who is a lawyer by trade but is not practising and has never worked in the UK as one.

If it ever came to it, there are presumably all sorts of issues with HK registered lawyers drawing up documents in the UK. But I doubt it would come to that.

She's bluffing. But the family fallout is the stuff of the Relationships board.

Roseformeplease Thu 25-Jun-15 10:23:49

Gemauve I will head on over to relationships (and indeed, have posted there before about this situation). However, I really cannot thank you enough for your advice and for putting my mind to rest. When an emotionally unstable sister starts firing off things in legal language and making demands.

I will try to get hold of anything she has signed but I am pretty sure that there were no witnesses / legal people there other than my sister and her husband.

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