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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To spend some of our DP 's money when they are self funding in care home.

77 replies

PicnmixTwixnBics · 02/03/2019 10:15

Both my DM and DF have recently moved into care homes due to ill health. They are self funding. In the last few years when they were still in their own home they gave my 2 DNs £1000. each when they passed their driving tests. Would it be seen as 'diverting assets'if they were to give a similar sum to my DD when she passes her test. My DS and I have LPA, and are managing their finances.

OP posts:
Babysharkdododont · 02/03/2019 10:16

Yes I think it would I'm afraid.

Alsohuman · 02/03/2019 10:20

I wouldn’t do it. When I controlled my mum’s money, every penny was spent on her.

Longpinknails · 02/03/2019 10:25

I think your parents are only allowed a certain amount of their own ‘assets’ and this would be coming out of that I’m afraid....I’m sure a solicitor will come on here and be able to advise.

Tennesseewhiskey · 02/03/2019 10:32

Do not take money out of their money to give to your child without advice.

Original poster
PicnmixTwixnBics · 02/03/2019 10:34

I understand that they shoukd be entitled to small weekly allowance. I have also heard that they could carry on giving gifts of money for birthdays and Christmas etc if it is what they have always done previously.

OP posts:
VeraWangTwang · 02/03/2019 10:35

I'd take legal advice

AllTheUserNamesAreTaken · 02/03/2019 10:37

Do your parents have capacity?

Knittedfairies · 02/03/2019 10:37

I think you would be unwise to do that without proper legal advice, whatever you've heard.

Desmondo2016 · 02/03/2019 10:37

You're right OP there are certain gifts to certain people that they are legally allowed to give and there's nothing wrong at all with maximising their legal gifting. Just make sure you keep an audit trail.

OffToBedhampton · 02/03/2019 10:37

Yes, it would be depriving them of assetts. It's irrelevant that they did it before for DNs, as their financial situation was different then - they were not requiring their savings to cover cost of residential care at that time. DD would be expected to repay it by LA. It's too large a sum. You also both risk safeguarding investigation as not acting in your DParents best interests as LPAs.

lyralalala · 02/03/2019 10:38

Are your parents still capable of deciding that's what they want to do or are they incapable of making decisions?

Being self funding they can do what they like with their money - they just need to be able to explain it if/when there comes the point that they can no longer self fund.

Check with the public guardian, but when I was acting for my grandmother you were allowed to continue with things like the usual birthday/graduation gifts, but nothing extreme. That was a few years ago now though so check it hasn't changed.

Original poster
PicnmixTwixnBics · 02/03/2019 10:43

The sum would literally cover 1 week's fees for one parent, so hardly using up all of their savings in one hit!

OP posts:
AllTheUserNamesAreTaken · 02/03/2019 10:43

If they have capacity, they are entitled to continue spending their money in the same way as they have always done - so if they tended to gift £x amount for birthdays/Christmas then they can still do so. It would only be deprivation of assets if the sole reason for giving the money away is to deplete their assets to avoid paying care fees/tax etc

If they don’t have capacity and you are deputy for their affairs then you must act in their best interests but can also gift etc in the same way that they always did.

I recall finding some info online when I dealt with my grandma’s affairs. Will try to find it

PretendLife · 02/03/2019 10:45

If they are self funding can you use the £3,000 tax free gift allowance? My sister and I used to take £3k each tax year from my Mum's money up until the point her funds got down to the level where the Council took over paying most of her care home fees. We had to provide a years worth of bank statements at this point which showed the £3k and this was not queried by the Council, so was obviously OK to do.

(I will just add that this money is in a separate account and we use it for buying clothes, going out for treats etc for Mum).

newmun · 02/03/2019 10:45

You havent andwered the wuestion of whether they have capacity? Is this their wish ?

newmun · 02/03/2019 10:46

Andwered*

newmun · 02/03/2019 10:46

Cant bloody type today

PretendLife · 02/03/2019 10:51

I will also just add that when my Mum went into care we were advised to use some of her money to purchase a funeral plan for her. She was self funding for about 18 months before her money got down to the £23,250 level. I know other people who have continued to take the £3k gift allowance whilst self funding.

LadAlive · 02/03/2019 10:52

It is depriving them of assets if there is an expectation that they will run out of money soon.
Previous gifts and desire to continue to do the same, don't matter.
You must take into account their current financial situation.

OffToBedhampton · 02/03/2019 10:55

@Desmindo2016. That is absolutely incorrect. And dangerous to suggest to OP. You are mixing up gift allowances for inheritance tax purposes, with deprivation of assets under the CRAG (now Care & Support (Charging and Assessment of Resources) 2014) Regulations.

You cannot do it OP.

MortyVicar · 02/03/2019 11:06

A power of attorney puts a duty on you to manage their affairs properly and in their best interests, so making sure bills are paid, spending money to make sure they're well cared for. It doesn't mean that you decide what the money is spent on.

I see where you're coming from, you want your DD to be treated the same, but unfortunately things aren't the same. And this isn't just about the tax implications and deprivation of assets, this is also about your legal duty as an attorney.

chandylier · 02/03/2019 11:11

Do if they're self funding, they're never allowed to spend any savings? That can't be right

ALargeGinPlease · 02/03/2019 11:11

My dm is in a care home, self funded at the moment, we are continuing to get money for birthdays and Christmas at the rate she did before she went into the care home. We also know it's her wish to gift my DC the same amount of money as my nephew's had, to help with driving lessons, when they're old enough. Although, realistically when my eldest is old enough, my dm's money will have run out.
We were under the impression that that was ok. The law seems very woolly, and there seems to be no clear amount set out as to what is reasonable. We hope if it ever comes to it, we can justify her spending. We talking hundreds, not thousands here.
I did suggest that we upped the amount gifted to us, but my sister is very conservative and was worried we may be asked to pay it back, so we didn't risk it.
As far as we can see, the rules seem to say 'reasonable spending', which is very open to interpretation - clearly my 'reasonable' is different to my sister's. Grin

OffToBedhampton · 02/03/2019 11:20

To PPs saying you can gift in same way as before No You Cannot!!!!' if it involves large sums!

It is literally theft (yes - police will arrest) if Donee lacks capacity, is in care home or needs care home, and you deprive them of assets by large gifts to others. That is not in their best interests.

I am in the field and this is the legal answer.

If ASD or OPG find out about any PPs those on here suggesting they took £3000 a year in gifts to themselves or others, when their Donee lacked financial capacity and was SF (self funding) or otherwise in residential care, you'll be investigated for Financial abuse. It's different if that money was used in items of treats or activities for the Person (Donee) themselves. Which is the only acceptable thing.

At best outcome, the LPA order in finances would be ended at court, recipient of gifts pursued through court to repay, and at worst the LPA themselves could end up with a criminal record.
Just because someone you know got away with theft , it does not make it okay.
A £3000 a year theft off a vulnerable person by POA/ deputy misusing their LPA in this way, would be taken very seriously.
Their money needs to stay available for them to use for their needs & care.

Even a capacitous person gifting away large sums whilst in residential care, would be seen as depriving themselves of assetts, treated as if they still had it and recipient of giftpursued, if it meant person came to ask ASD for public funds earlier.

lyralalala · 02/03/2019 11:22

And this isn't just about the tax implications and deprivation of assets, this is also about your legal duty as an attorney.

Attorneys are allowed to gift on behalf on customary occasions.

OP - what you need to do is discuss with your DS where your parents are at finance wise. Any gift you give must be of "reasonable value"

When deciding whether a gift is reasonable, ask yourself:

<strong>did the person used to give gifts of this value when they had mental capacity?</strong>

<strong>would the gift affect the person’s ability to meet their living expenses, now and in the future?</strong>

<strong>what is the person’s life expectancy – and will they have enough funds for the remainder of their life?</strong>

<strong>does the gift reflect what the person has said they want to leave to people in their will?</strong>

Gifts must always be well within what the person can comfortably afford. ‘Affordable’ varies a lot from person to person. A £200 gift has a bigger impact on someone with £9,000 than someone with £90,000.

So £1000 if your parents have a million in the bank and will be self funding long term is very different to them having 30k in the bank and being very close to the limit for being funded.

If you do give the gift you must record it and put it in your annual spending record.