Stock markets, inheritance, i don't understand

[Vlinty]

My mother died in 2024 and father this March. Years before they had made me power of attorney (because my husband works in finance he is a lawyer, so could help me. I am clueless and they knew this.)

After mum died, my DH took over, because my dad had dementia.

He changed a lot of their funds over to higher risk , their financial advisor told me they had always wanted low risk.

We sold the house and dh got me to invest with another fund manager. Take the money out of ns&I as well.

So some money with new advisor, some with old advisor but all higher risk than my parents had it

Now this morning he has told me that everything is down 25%.... obviously because the markets have plummeted following trump's tariffs.

I am so distraught, I have 2 siblings who will want their share of the money. I'm really angry with dh and he now won't talk to mr because I'm panicking and he won't help me - just says I won't listen. When it is him who will not answer a straight question.

Please help me calm down.

On the basis that the funds didn’t belong to the husband, and still don’t, it wasn’t his call. As the OP’s father was elderly and with dementia it was extremely unlikely that a long term investment strategy of accepting greater risk in the short term was appropriate.

The reference to ‘mumsplaining’ is bloody rude or do you think women who have borne children can’t wrap their heads round investing.

I am very sorry for your loss. However, I would be really angry with you at failing in your duty to properly manage their finances as part of your power of attorney. You had power of attorney, not your DH, so the duty lay with you. Are you also an executor? I would get professional advice, although it will cost, and apply for probate. In the mean time, you need good quality financial advice and you need to talk to your siblings. You can change the will with the agreement of all the beneficiaries, a deed of variation, so if the stock market doesn’t pick up you could offer to change the % in their favour to try to address their loss.

Op, 2 issues here. Who was the executor of the Will and is there funds to pay out the other beneficiaries from the house sale?

If your husband invested before your father died then that wasn't such a great decision as Trump's plan for tariffs was known since last year.

Can I point out that the inheritance did t belong to the OP or her siblings - so they haven’t lost anything! They have only gained. If their father had lived longer and needed residential care due to dementia, then the inheritance would have been further reduced.
As it is, the parents managed to earn and save enough money to ensure their children received what sounds like a decent handout, for which they should surely be grateful? The complaining that the DH somehow acted in a way that has now reduced that handout is grabby and distasteful to say the least.
”Poor us, we didn’t benefit as much from out parent’s deaths as we thought we would”

Another vote for you to look up the free Rebel Finance School course. They've just taken down their 2024 course and their next one starts in June.
Sorry but it's not helpful to say you're clueless. Get educated on finances or else you will be taken advantage of.

Were you the only attorney and did you act in their best interests?
What do the wills say, equal splits or specified amounts.
Who are the executors?
Were your siblings aware that you passed over financial decision making over to your husband without fully realising the implications of his actions?

I’m not a lawyer but my limited understanding is that a POA ends on death and that the executor/s of a will can be financially liable themselves if they don’t follow the correct actions with regards to estate finances and distribution to beneficiaries. Even if you don’t understand it makes sense to be as well informed as you can be, seek legal advice*, and follow the correct procedures.

*I hope greed and making money on the side did not come into it.

My father had assets in the stock market when he died.

we applied for probate and it was granted.

the people who inherit can choose whether to transfer the assets into their name or whether to liquidate them into cash.

at the moment, you like most of the rest of us with investments have seen their value go down.

it doesn’t mean you are down from when you bought them (although you might be) and you don’t actually have a loss until you sell them.

at the moment, your dad’s estate is in investments. When probate actually gets granted and you get to the point of distributing the assets (which you are not yet at) they can choose whether to take the investments or sell them for cash.

The finances WERE properly managed. The parents lived comfortably well, as they had a house and money invested. Investing in this instance didn't reduce their quality of life, they didn't die paupers. Why on earth would the will need to be changed? The siblings haven’t LOST anything because it wasn’t theirs in the first place!

@Vlinty I’m sorry for your loss.

Firstly, do not panic, I know this is scary but panicking is only going to make it worse.

Do not try to sell the shares etc. or try and fix it. You need to take a pragmatic long term approach but you also need to be transparent with your siblings.

I assume you are an executor as you were LPoA. As your DH is a lawyer ask him to calmly explain what has happened and what his proposals are for next steps. Make it clear he must not do anything without you, and your siblings, understanding the options and agreeing an action.

My first thought is IHT, as your parent’s assets (house) have previously been sold I assume their estate is primarily savings and investments. Ask your DH to provide you with a rough breakdown of the estate’s value as at your Dad date of death. That will be the date used to value shares etc. Then work out if IHT maybe due. This is a key factor.

Then work out the current value. As pp have said until you have probate you can’t sell the shares and share prices do fluctuate. At the moment it is a loss on paper only, you only realise the true loss, if any, when you sell. Again you can eventually decide to transfer shares to siblings to potentially buy time to reduce the loss.

You and your DH then need to have a face to face meeting with your siblings/beneficiaries and explain the situation. Trying to hide it will make it far worse in the long run. Accept they will be angry and need time to calm down. Having a pragmatic plan of action to mitigate losses e.g. time for share prices to go up, will help. Your DH has to be prepared to face tough questions and to answer them.

I reiterate at this stage do not panic and be patient to give the markets a chance to stabilise.

The markets have been jumpy for a while.
A major re adjustment has been on the cards for a while.
Your husband cannot be that smart to have been moving money into high risk vehicles recently.
Obviously no one could have fully predicted the fxxk up that Trump has made though.

It might be best to sit things out and wait a year or two for a recovery🤞

It sounds as though OP's DH sold the house and invested the money in stocks and shares before OP's dad died.

Doesn't that reduce the amount that OP and her siblings can inherit before being liable for IHT? I thought that if one parent dies and leaves everything to the other parent who then dies, if the estate includes a property the amount that can be inherited befoe IHT is due is £1 million but if there is no property it is £500,000.

Surely if her DH has done that and has then lost money on the investment of the proceeds of the property he hasn't properly managed the finances.

Finally, a voice of reason on this thread.

did your DH have POA for your parents too? If not how was he able to arrange these investments? You should have involved yourself and had meetings with the financial adviser. You should have spoken up against withdrawing from NS&I. Your DH I imagine is a high risk taker and saw it as an opportunity to maximise funds and he’s lost that gamble. But it doesn’t sound like he was acting appropriately. You potentially have a claim against st the financial advisers if they weren’t checking with you as POA.

It still applies as many people sell houses to go into care / downsize etc

I wouldn't stress about it. When do you guys need the money? If it soon i'd understand.

The siblings inheritance is less than it would have been if it had stayed invested as OP’s father chose.

You can say it’s tasteless or whatever but OP’s husband has reduced the overall inheritance and disregarded how OP’s father chose to manage his money. As none of the money was his, that wasn’t his call.

I sympathise with the husband here. He has been asked to manage the money and has managed it as he sees fit. A couple of my family members who are incredibly good at high risk investing (both performing at the top of their game within banks, millions of £ in bonuses over the years) have been burned by the tariff changes.

If you're all (or more likely your husbands) so good, please make some suggestions as to how this drop in value could have been mitigated without a loss in fund value

If you look on Money Saving Expert website
The highest interest at the moment on savings is approx
4.6% or 5% this includes tax free ISAs

You may achieve more in Stocks & Shares
Or Stocks & Shares ISAs

Each person can put a maximum of 20k into an ISA per year tax free

Each person can put 50k into Premium Bonds & all prizes are tax free

Your parents may be better off investing in a Pension as well or an annuity?

Why do you not take control of their finances yourself ?

Do your parents need to pay tax each year ?
You will need to do this via self assessment tax

Well he could have left the investments as they were. He got greedy.

Low risk, usually means bonds, cash, some commodities, traditionally low risk, poor growth.

The markets jumped when he became POTUS, & the FTSE and Dow Jones are still higher than in 2021/22/23 and 24......

DJ dropped to 21000 in Covid, its now 38000, a massive increase in just 5 years...

A friend of mine took his FS pension, moved it all into high risk funds, that was 12 years ago, his initial 200k is now, even after this week, is worth over 1m.....

I did not, my FS pension pot has hardly moved above inflation.

it is too late to move the money into a lower risk option now, that would mean potentially selling when prices are at a low.

@AppsDeleted the parents don’t need to pay tax each year - on account of them both having died. I don’t think they have much use for a pension either.

I agree. It is irresponsible to put money into a higher risk option when the owner of the money is elderly and has dementia. The op’s husband was, imo, investing the money to make potentially higher returns to benefit the future beneficiaries. This is a clear breach of the duty with regard to the responsibility of having power of attorney. Putting aside the glaring issue that the dh was not even the person with POA!

nothing can be done until probate has been granted.

As they’re both dead not even Martin Lewis can help them now…