"Inheritance" before someone dies...

[MrsCosmopilite]

After some advice please.

Have elderly relatives (married couple) who're both showing signs of dementia - waiting to have them assessed.

One is more 'compos mentis' than the other so to speak and has advised that they want me and my sibling to have a reasonable sum of money, currently in a joint account in their (married couple's) name.
My sibling and I have power of attorney.

As the relative wishing us to have the money is in their right mind (currently tends to get confused over what day it is, call me/sibling by the wrong name BUT knows they have savings, knows they have investments, knows what happens on a daily basis) - should they be putting their request in writing to the bank that holds the money?

My guess is that it will not look good (or possibly not be legal) to simply change the name on the account using POA. At present it is not gaining much interest as it's a crap bank! :/

Relative is clear that my sibling and I should have equal shares of this money - has been saying this for around a year. Relative cannot physically travel to the bank can can't/won't use the phone or internet banking.

When you say reasonable sum of money, how much approx? As it could impact on potential care home fees / inheritance tax.

That aside, relative can simply write a cheque if it's in a current account, or a POA can be set up. Simply writing to the bank wouldn't be acceptable.

Thanks Rockchick - it's around £75k to be split between two adult siblings.
I believe it's in a deposit/savings account.

Therein lies the problem. For 50+ years, the person has not had to deal with any financial/legal matters so gets absolutely flustered/flummoxed with anything like this.

We have all the POA documentation but I wasn't sure if legally that made things tricky if we were to change the names on the account.

It would be earning far more interest elsewhere anyway, so I do think that the money should be moved to get a better return rate.
It is quite possible that in the future that the money will be needed for continuing care, and I think that if that were the case, my sibling and I would need to use that money to fund it.
I would have expected that the 'gifting' of this sum could be perceived as changing their (married couple's) financial situation, so that if they need further care in the future, they'd appear to have less money of their own.
My relative does not understand this, nor does my sibling.

It could easily be seen as an attempt to avoid IHT and care home fees. Do they have property and assets as well ? There is a legitimate amount and circumstances in which to gift money but anything over and above would be treated as part of the estate should they die within 7 years.

If you and you sibling already have POA then you just need to register it with the bank. If it's one of the old Enduring Powers of Attorney it will need registering first with the Court of Protection as they're invalid once the donor loses the mental ability to deal with their affairs directly. If it's a new Lasting POA or already COP stamped then you're good to go.
You and your sibling are then authorised to transact and do as you feel is best, i.e. Put the money in a better account, use funds to pay for home improvements etc. Or if they've indicated they'd like for you to take some as a gift, then you can.
Just be wary of three things:

1. if they pass away within 7yrs then the amount gifted will be subject to inheritance tax. This scales, so it's less if they pass in 6yrs say, but you'd need to consult a solicitor about this.
2. if they require FT nursing care, and all of their money has been 'gifted' away, I don't know where that puts you legally, I'd have thought it'd be seen as hiding funds, though I have no idea. As POA you will be required to provide all accounts and explain large debits I think.
3. what does their will say? Does it agree with what they're saying now? Are you the executors? If not, again you could be on shaky ground when they pass, as the POA is invalid at that point, and the executors will be dealing with the estate - questions may be asked as to where a large part of the estate has gone? Again, don't know the ramifications of this. To be honest, you need to have a thorough discussion with the family solicitor to find out what you can and can't do. Yes you'll likely have to pay a fee of some sort, but worth it not to end up in hot water.

Lasting POA
Their wills leave everything to me and sibling
They own their own property. If they had to go into care then the proceeds of the sale would cover residency for both of them for around 5-6 years quite easily.
Both are 90, so likelihood of passing way within 7 years very high.

My thinking is to move the money, change the a/c to "Z & Y POA for A&B" (or similar) and use it in first instance for care charges if/when needed.
Sale of house can follow later - as and when needed. At present they both wish to stay in their own home.

Mrs Cosmo. I am a probate and private client lawyer who deals with LPAs regularly.
I think you are doing the right thing by transferring the funds to an account with a better rate of interest and with the designation as you suggest.
LPAs allow you to make gifts but only those which would be considered reasonable by the court so annual birthday and Christmas presents, yes, £75k worth of savings, no, especially as capacity appears to be questionable.
You need to avoid accusations of misappropriation of funds and, for care home fees, deliberate deprivation of assets.
I think your solution is completely the right one.

Thankyou Poshfrock

I don't know how much longer either of them will manage to struggle on. One is in poorer health than the other, but reasonably stable.

The relative feels that they'd like us to make use of the money whilst they're around to see us spend it, but I definitely don't want the whole misappropriation of funds/deprivation of assets to come up.

I shall investigate reinvestment for the near future.