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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To be cautious of this money I am being given?

49 replies

LaraWearsZara · 08/02/2023 19:26

My grandfather has dementia and has no idea who any of us are.
My step-grandmother has now set up a standing order to pay £100 a month into each of his grandchildren accounts because "it is what he would have wanted".
He is 81.
I am obviously very grateful however we have been told not to tell our parents (his children), the reason being that they're all already falling out over finances and I do feel that this is a way to start whittling down his money so they get less. Only his children are in the will, not his grandchildren.
My step gran has power of attorney.

Aibu to feel like this could come back to bite us?

Very clueless on all of this.

OP posts:
plumduck · 08/02/2023 19:27

A power of attorney she is allowed to carry on making gifts if that is what he usually would have done.

Original poster
LaraWearsZara · 08/02/2023 19:29

Oh really? That's reassuring. Would it be subject to any form of tax if he dies?

OP posts:
OneForTheRoadThen · 08/02/2023 19:29

I think you're right to be wary especially if he needs residential care as this could be seen as deprivation of assets.

ManchesterGirl2 · 08/02/2023 19:30

I'd be worried too. I'm no expert though.

Are their accounts separate? Is it from your grandfather's?

She may be on dodgy ground with the power of attorney, and you may end up owing inheritance tax on the money.

OneForTheRoadThen · 08/02/2023 19:31

plumduck · 08/02/2023 19:27

A power of attorney she is allowed to carry on making gifts if that is what he usually would have done.

She's not carrying in doing it though, this is a new thing.

Original poster
LaraWearsZara · 08/02/2023 19:31

He is being looked after at home, the house has been adapted and he has carers in 3x a day 7 days a week, along with the care of my step gran who is younger and able to do a lot for him.
The plan is that he will never go in a home - i don't believe he will have too long left as he's now at the point he can barely eat, liquids are given only and not a lot. He's totally incontinent and barely opens his eyes
He's deteriorated a lot in the past year.

OP posts:
Original poster
LaraWearsZara · 08/02/2023 19:32

Yes separate accounts and this is being transferred from his account

OP posts:
ManchesterGirl2 · 08/02/2023 19:32

If in the UK, here are the rules she ought to be following, from the power of attorney point of view.

www.gov.uk/make-decisions-for-someone/making-decisions

PeekAtYou · 08/02/2023 19:33

It could bite you in the bum in the sense that if your parents find out then they could be annoyed.

Darthwazette · 08/02/2023 19:33

The estate will pass to his wife free of income tax burden surely?

Crumpledstilstkin · 08/02/2023 19:35

Has he done this before? A family member did this when POA - she gave similar amounts to previous for similar occasions. Since the family member in question had consistently been generous it was easy to justify.

meganorks · 08/02/2023 19:36

I think there are some rules about the size of monetary gifts within a certain time period of a person dying (i think its within 7 years). But it is around much larger sums than this. My understanding is that, for example, if £10k was given to someone as a gift, but then the gift giver died, then it would still be considered part of the estate. But the amounts involved before inheritance tax is due are quite high

plumduck · 08/02/2023 19:37

ManchesterGirl2 · 08/02/2023 19:32

If in the UK, here are the rules she ought to be following, from the power of attorney point of view.

www.gov.uk/make-decisions-for-someone/making-decisions

Yes was about to post this. It must be in their best interests but this can include eg giving assets to a spouse for inheritance tax planning.

plumduck · 08/02/2023 19:38

The rules are strict I can't remember exact limit but its like some for a wedding gift, some for birthdays and then it's excluded from inheritance tax calculations

PizzaPizza56 · 08/02/2023 19:39

An attorney isn't allowed to start making new gifts if the donor has lost capacity. They can continue existing gift arrangements in some circumstances. Children could report her to the OPG for not following the rules.

Original poster
LaraWearsZara · 08/02/2023 19:39

He gave 1 large lump sum around 10 years ago to 1 grandchild but that was it. They were supposed to pay him back but not sure if that ever happened.
I've never asked as I've never been particularly bothered by finances and who gets what.

I'd like to tell my dad about this arrangement as he is clued up and will know if it's something to be wary of, but I also know he will be livid that she's set it up in the first place and I am reluctant to cause yet another argument as I genuinely think she's trying to do the right thing.

I don't want to break her trust and upset the other grandchildren too if the arrangement is withdrawn.

I'm so stuck!

OP posts:
harriethoyle · 08/02/2023 19:39

Anyone can give 3k total a year without that attracting inheritance tax. Anything over that attracts IHT on a sliding scale if the gift giver dies within 7 years.

I think GM could be in a grey area of POA if such gifts haven't been customary before GF lost capacity. Particularly that she's saying don't tell your parents...

Elsiebear90 · 08/02/2023 19:40

Why do you think your step nan wants your grandfathers children to “get less”? I would be concerned she’s just using this as a way to get one over on his kids.

meganorks · 08/02/2023 19:40

My sister used to pay similar amounts (although not regularly) to grandkids when my mums savings were about to go over the amount where you get free care. Basically that would gave involved a lot of long-winded faff whereby my mum would have been eligible to pay for her own care, but pretty much as soon as she started would be back under the threshold and would have to reapply and wait months for it to activate. With interest rates rising, this might come around quicker. Maybe this is the reason?

PizzaPizza56 · 08/02/2023 19:43

www.gov.uk/government/publications/giving-gifts-a-guide-for-deputies-and-attorneys/opg2-giving-gifts-for-someone-else-web-version that's the resource you want. No capacity means gifts shouldn't be being given.

picklemewalnuts · 08/02/2023 19:43

I think you are allowed to give away income, but not assets/savings. So unless he's got 20 GC you are probably ok. But I'm not an expert

plumduck · 08/02/2023 19:49

PizzaPizza56 · 08/02/2023 19:43

No it doesn't. Read section 3 again.

plumduck · 08/02/2023 19:50

LaraWearsZara · 08/02/2023 19:39

He gave 1 large lump sum around 10 years ago to 1 grandchild but that was it. They were supposed to pay him back but not sure if that ever happened.
I've never asked as I've never been particularly bothered by finances and who gets what.

I'd like to tell my dad about this arrangement as he is clued up and will know if it's something to be wary of, but I also know he will be livid that she's set it up in the first place and I am reluctant to cause yet another argument as I genuinely think she's trying to do the right thing.

I don't want to break her trust and upset the other grandchildren too if the arrangement is withdrawn.

I'm so stuck!

If you are unsure then contact the office of the public guardian.

Theoscargoesto · 08/02/2023 19:51

My knowledge in this area is sketchy so please check but, first, I think grandparents can give small amounts of money to grandchildren in a tax year without worrying about tax or risk of repayment (possibly £3,000 a year). Over that, and as to other gifts, lifetime gifts don’t form part of a deceased’s Estate if the giver lives 7 years. If the giver dies sooner then the gifts will form part of the taxable Estate. I’m not sure how a POA changes that.

Regardless of the legalities, what a difficult position you are in, caught between step grandmother and your own parents. I think my loyalties would lie with my parents, but with your grandfather so ill I can understand you not wanting to get caught in the middle. That said, once he does, and it all comes out, what will you say to your dad?

kitcat15 · 08/02/2023 19:51

Surely all the money will go to his wife anyway not his children

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