Page 2 | To be cautious of this money I am being given?

LaraWearsZara · 2023-02-08T19:26:45+00:00

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.

Original poster

LaraWearsZara · 08/02/2023 19:54

Thanks for the advice.

I'm still confused 😬

I think the issue my step gran has is that his 3 children have been pretty useless. 2 haven't visited for over 2 years and don't even bother checking in.

1 lives hours away but does call.

There's a dispute between them as a significant amount of money was lent to 1 of them years ago and its transpired it was never paid back. Now the other 2 are saying it needs to be paid back as the Will states his money is to be split equally 3 ways.

It's caused a huge rift. Meanwhile us grandchildren are the ones who visit and call regularly and that's why she wants us to have some money as she is cross with them, and has therefore said to keep this monthly gift to ourselves for arguments sake.

OP posts:

plumduck · 08/02/2023 19:57

LaraWearsZara · 08/02/2023 19:54

Thanks for the advice.

I'm still confused 😬

I think the issue my step gran has is that his 3 children have been pretty useless. 2 haven't visited for over 2 years and don't even bother checking in.

1 lives hours away but does call.

There's a dispute between them as a significant amount of money was lent to 1 of them years ago and its transpired it was never paid back. Now the other 2 are saying it needs to be paid back as the Will states his money is to be split equally 3 ways.

It's caused a huge rift. Meanwhile us grandchildren are the ones who visit and call regularly and that's why she wants us to have some money as she is cross with them, and has therefore said to keep this monthly gift to ourselves for arguments sake.

The loan won't be counted as a "loan" unless it was all done with proper agreements etc.

Original poster

LaraWearsZara · 08/02/2023 19:58

I honestly don't think it will, based on previous conversations.
Step gran was quite well off before they met and he moved into a house she owned etc. I think they've kept finances quote separate since they've been together.
I don't know a lot more other than his money will go to his 3 x DC only

OP posts:

ihatewinter2 · 08/02/2023 20:08

Darthwazette · 08/02/2023 19:33

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

Only if they are married or she is named in the will. Forgive me if it says that they are married and I've missed it.

Whatthediddlyfeck · 08/02/2023 20:12

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.

It really wouldn’t, a person is allowed to give their grandchildren pocket money on an ongoing basis -my dad did it too (and continued when he had to go into care, it was never questioned )

kitcat15 · 08/02/2023 20:13

Are they married? If so it will go to her regardless of separate finances

OneForTheRoadThen · 08/02/2023 20:18

The difference in your situation @Whatthediddlyfeck is that you've said your dad was already giving the money away on a regular basis. It's not suddenly been set up by someone with a POA and the OP has said it's with the aim of reducing the amount left to the children in favour of the grandchildren. It absolutely can be seen as deprivation of assets

www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/

JussathoB · 08/02/2023 20:23

Surely any issues about deprivation of assets would only apply if the GD had to go into care and also did not have enough assets to pay any fees he needed to?

JussathoB · 08/02/2023 20:26

Sorry GF, I’m not so good on the MN abbreviations

Whatthediddlyfeck · 08/02/2023 20:26

JussathoB · 08/02/2023 20:23

Surely any issues about deprivation of assets would only apply if the GD had to go into care and also did not have enough assets to pay any fees he needed to?

Exactly this. A person cannot live their life and never spend any money ‘in case’ it’s seen as deprivation of assets. My dad spent a lot of money on his grandchildren in his later years because it gave him a huge amount of pleasure to help them out. It was never questioned during financial assessments when it came to care.

OneForTheRoadThen · 08/02/2023 20:26

JussathoB · 08/02/2023 20:23

Surely any issues about deprivation of assets would only apply if the GD had to go into care and also did not have enough assets to pay any fees he needed to?

Yes, or needed care in his house that wasn't paid for privately.

The issue about whether or not it's appropriate for someone with POA to start gifting money is separate.

OneForTheRoadThen · 08/02/2023 20:29

Did your dad have someone acting as a POA though who had started making these gifts when previously he hadn't done @Whatthediddlyfeck ?

Floofyduffypuddy · 08/02/2023 20:31

Interesting.

Re your dad I just wouldn't mention it and it seems like the step mum is doing a nice thing?

Don't get involved.

At the end of the day it's 100 a month it's not that much money In this context.

ensayers · 08/02/2023 20:36

If she has power of attorney then she can make the decisions that she believes he would of made for himself.

Whatthediddlyfeck · 08/02/2023 20:37

OneForTheRoadThen · 08/02/2023 20:29

Did your dad have someone acting as a POA though who had started making these gifts when previously he hadn't done @Whatthediddlyfeck ?

some of them, yes

lilyfire · 08/02/2023 20:38

Just to be clear if it is subject to inheritance tax after he dies you don’t have to pay it - the estate does.

saraclara · 08/02/2023 20:51

If he's coming towards the end of his life, deprivation of assets isn't going to be an issue.

Step GM probably just realised that the GCs aren't going to get a look in when it comes to the inheritance that the offspring are going to fight about. She's doing what she's thinks her DH would want, and that's fine. It's not like she's giving everyone £1,000 a month. It's just a kind gesture, and not an amount that I'd feel obliged to tell parents and aunts/uncles about.

Genevieva · 08/02/2023 20:58

If these gifts come out of income then no there are no tax implications, even if both grandparents die. Ie if they have pensions that cover both the gifts and. their general expenditure, so the gifts are not seen as coming from capital. This means they are not subject to IHT

Plus, your step-grandmother is within her rights to spend their family money as she sees fit. So, while she has formal power of attorney, it is somewhat irrelevant if they have joint assets.

Genevieva · 08/02/2023 21:01

From an IH perspective, it would make more sense if he left everything to his wife and then she gave it to his children when he dies. But it sounds like it is too late for him to consider changes to his will.

Original poster

LaraWearsZara · 08/02/2023 21:02

Thanks everyone, these last few posts have really reassured me.

I had no idea that inheritance tax came from the estate, I thought we may get chased for it so thanks for that @lilyfire

Like you say @saraclara , £100 a month isn't huge and I know it's what he would want. We are using it towards childcare so I would hate to lose it. It's just a shame it's all in secret as I do worry about a fall out if it comes out.

Thanks again to everyone who's offered advice on here it is much appreciated :)

OP posts:

ittakes2 · 08/02/2023 21:43

I think an issue is if he dies within 7 years you will have to pay tax on the money (the laws regarding thresholds are changing soon). Were ironically if she was paying you than as long as she lives another 7 years no tax.
I am sorry about your grandfather dementia is horrible.

gogohmm · 08/02/2023 21:48

£100 isn't the kind of money that the court of protection would be worried about. If you are concerned, keep it to one side

Riverlee · 08/02/2023 21:56

I don’t think she can use the PoA as a reason to give the money.

poa.

giving gifts

if I read it right, she can give money at usual gift-giving times, such as birthdays, but not for anything new.

saraclara · 08/02/2023 22:00

ittakes2 · 08/02/2023 21:43

I think an issue is if he dies within 7 years you will have to pay tax on the money (the laws regarding thresholds are changing soon). Were ironically if she was paying you than as long as she lives another 7 years no tax.
I am sorry about your grandfather dementia is horrible.

OP won't. The estate will.