..to think it's wrong to ask for an advance on inheritance

[RealSeal]

My brother is asking for "an advance on his inheritance" to help him buy a house. He's in his 50s and has a decent job but is getting divorced having been separated for several years. He admits himself he could have made better financial decisions in the past.

Father is elderly and in a care home, but has no serious illness and may have several more years ahead of him. There are 5 of us. Another sibling has Power of Attorney but consults us, about major decisions. My father does have substantial assets at the moment. They are being spent at a considerable rate on care costs and, of course, we have no idea how long they will be required or whether they may need to increase.

If we don't agree to give him the money my brother will accuse us of ganging up on him, not being sympathetic. I appreciate he’s in a difficult position and not where he expected to be at this time of his life, but we surely all have to be responsible for ourselves and our own decisions? He’s not in a desperate situation, about to be made homeless. He would just like me to buy a house.

One of my other siblings thinks it must’ve taken a lot for him to ask. I’m not so sure. I think he’s got nothing to lose. If he gets the money, great for him. If he doesn’t, he’s no worse off. He’ll blame us for his situation. He doesn’t care about nurturing relationships with us.

As well as being against it in principle I’m also worried that, if it was agreed to, how would we ensure that this “advance” was taken into consideration when my father’s will is eventually executed? It just seems very messy and would prolong the stress of dealing with this.

AIBU to say no?

id say no but on the basis your father could be penalised for giving the money away if he runs out of savings to pay for hte care home

How much is he asking for and what proportion of the estate is it, OP?

If your sibling holds financial power of attorney then this might not be a request which can be granted without the approval of the court of protection. Suggest asking a solicitor for advice.

How much capacity does your father have?

I would think this might come under deprivation of assets for your Dad if he's likely to run out of his own money to pay for care in the not too distant future.. So something to look into before anyone agrees to anything.

I terms of the will, you could get a statement added to the will stating your brother has had £xxxx and that should be subtracted from his share. My dad has done this as he gave some money to my brother.
This assumed that your dad is in a condition to do something like this though, and if there's a active power of attorney in place I guess not..

The main problem is that after several more years of care home fees, there may be nothing left for the other beneficiaries. I think I'd be suggesting that the same amount was advanced to all beneficiaries and take the risk as to whether the council eventually claim it back when the money runs out. The longer he lives between making the gifts and his death, the less chance of the council claiming deprivation of assets, and if he doesn't live for many years to come, the council may never have to take over paying care fees, so they won't care about deprivation of capital.

I agree with @chipsandpeas Giving away large sums of money when he is already in a home would absolutely be seen as deliberate deprivation of assets.

I don’t think it’s ever ok to ask. If your dad offered it would be different, but this seems awful. What if your dad needs expensive care later or wants to spend it on something else? None of the money is your brother’s and there is no guarantee that any of it ever will be.

I don’t think you have any choice. If you are administering your father’s finances for his benefit, you have a legal duty to do just that. IIRC the rules are very clear, you can arrange smaller amounts that would normally be spent on gifts, eg £50-100 Christmas present. You can’t give a big chunk to someone.

I think there's nothing wrong with it on principle, though it may be without issue refused as inconvenient since it's a 'favour' for the parent to give money in advance and thus deprive themselves.

In some circumstances in the UK, pre-death significant gifts to children beyond the normal support of parent to child are treated as advances of inheritance. In Scotland, if there is more than one child who claims legitim and one of those who do is the child who benefitted in such a way, the other may call upon them to collate, with the effect that the legitim fund nominally includes the extra already given to that one child. So in effect the calculations on the division of the estate treat it as having been an advance. On this basis, I don't think advances are so beyond the pale. Although I personally would not venture to ask in life what I have been promised by testament.

You can say no - in fact you can say what you want - how he feels about it (ganging up on his or whatever) is up to him. Do I think he’s in a shit position? Yes. He just wants some sort of stability I guess - and like you said - it’s not your fault he’s made shitty decisions that have left him with no money to buy a house, he’s asked. You can say no and if the general vote is no, then hey - too bad for your brother 🤷🏽‍♀️

It would very much be seen as 'deprivation of assets' should your father's care needs extend beyond his means to pay for himself.

It would also very much be seen as an abuse of the POA - NOTHING about this is in your father's best interests.

If you can find a legal way around the above points, it might also be that should your father's funds dwindle below what should be the level of the remaining siblings' 'inheritance', that your eb will have had far more than the others, which will build huge resentment.

Your DB can wait and rent in the meantime. Should there be any funds left upon your father's death your db will inherit his share.

You will need to work out what is the estate worth now, how much are care costs, how long is dad reasonably expected to live, and what will be the value of the estate then when he dies, once you have deducted all the care costs.

In theory, if you were all minded to help your brother, he could have one fifth of what might be left.

But once care costs are involved, I am not sure that's a good idea as these are supposed to take priority, I believe.

Your Dad needs to be careful about giving away money, in case of care costs.

An inheritance is what someone might get after a death - not before.😗

@MankySkinThing he hasn't said! I suspect a substantial amount given he says he thinks there's enough money to take some or all of his inheritance early ( how he knows what the eventual sum remaining will be I don't know!)

You need legal advice around deprivation of assets.

But I would think about what your Dad would prefer if it was his decision alone.

It should be an absolute immediate no from the sibling with Power of Attorney. Your dad will need his money to pay for care. If there is money left to distribute after he has passed away, then you’ll all inherit. If it’s all spent on care, there will be no inheritance.

Power of attorney doesn’t mean you/siblings can authorise large gifts or asset transfers from your father’s funds.

Chiming in with others saying IF your father has capacity, this is his decision. If he doesn’t, this isn’t something that can be done under POA. POA allows the attorney to manage the assets on behalf of the owner of the assets and for the benefit of the owner. It does not allow for more than token gifts.

But the inheritance of which he speaks will be out of whatevers left when dad dies. So the money at this stage doesn't even really exist, it's theoretical. As many say, there's every chance it will all be eaten up by care home fees, medical stuff etc. I think if anything he can try and ask for a loan, but what if he takes his alleged share then in a year or 2 your dad can't pay his care fees?
I'd not be keen but I guess legal advice is required.

This could well be classed as deprivation of assets. You can't start giving money away once you're in a care home as it can be viewed as doing it to avoid using it for care home fees.
I would ask how much money your brother thinks will be left by the time your father dies? It may not be very much and presumably he'd get 1/5th of that?

If the poa is inforce it is extremely unlikely this is ok

https://www.gov.uk/government/publications/giving-gifts-a-guide-for-deputies-and-attorneys/opg2-giving-gifts-for-someone-else-web-version

POA does not give the right to deal with the money as if they were the principal. Your dad could do it, it's his money, but the attorney cannot. Their legal duty is to operate your dad's finances in HIS best interests.

So however much your brother wants the money he cannot be given it without the attorney breaching their fiduciary duty.

What does your father want to do?

I think id want my brother to have secure housing if possible in this situation assuming all other siblings are securely housed. Not to say I wouldn't feel a bit frustrated.

Does he still have capacity to make the gift himself or would the attorney be making the gift. there is no authority to make this kind of gift under a PoA. It’s an absolute abuse of power for an attorney to make this kind of gift.

if father has lost capacity and he and sibling with PoA were supportive of the gift, they would have to make an application to the court of protection to authorise the gift.

it depends on his assets, unless there is no feasible way the money could run out from being spent on care (Ie very high assets and income) how would it be in your fathers best interest?

if he is already in a care home this would definitely be deprivation of assets. This is only an issue if his assets run out and he requires local authority funding for his care.

Exactly so.