Financial planning, POA, advice for recently widowed Mum

[julesover40]

I dont really know what I'm doing or where to start. We recently lost my lovely Dad , suddenly, and he has left alot of 'loose ends' behind.
His will was over 20 years out of date. We're not talking huge amounts on money, maybe a few hundred thousand plus the family home.
Everything will pass to my mum, so no issues there. But how do we go about looking after mum's interests? She is only early 70s ,in good health thankfully.
We need to get a new will drafted, a POA put in place for the future, of which she's in agreement with. Do we need to get a an IFA? or a financial planner? f so where to even begin finding someone she can trust. Mum is of the era of trust no-one.
We really want the existing savings to be working for her so she doesn't need to worry.
Their 'current' solicitor seem pretty useless, so don't really want to go to them for advice.
Any advise or pointers appreciated x

So sorry for your loss. No advice sorry as am in similar as don’t know where to start with PIA etc.

How was the will out of date? Did he not mean to leave everything to your mum? Or do you mean you don’t know where the assets are?

As in the mortgage had been fully paid off,lots more assets etc

I'm sorry to hear this.
It's so hard, we want to get things clear for her, but it's so hard without getting to emotional.
Hopefully some good advice will come along soon x

POA is a good idea. You can do this yourself, though it may be easier to get a solicitor if you’re feeling overwhelmed (though obviously you will have to pay). Same with the will. Though does you mum have a will currently? Worth checking, as it may still be valid. If they’re written properly they can be future proofed for death if a spouse.

Sorry for your loss OP.

Which have a page about finding an IFA

https://www.which.co.uk/money/investing/financial-advice/how-to-find-a-financial-adviser-afZ375F6BIiC

Maybe go on your local FB info/business pages and ask for recommendations for will writing services? It doesn't have to be a solicitor as there are many independent/specialist will writing companies. We used WSL (Will Writing Services London) who cover England and Wales and are very knowledgeable. The legal consultant came to our house as DH is very ill with mobility problems).

Consider being the executor yourself if you feel able to do probate, because a solicitor will take a percentage of the pot for doing it. I did probate for my late dad, and will do it too for my mum when she leaves us. If they have a relatively simple estate it's not difficult.

Meant to add, most will writing companies can help with setting up LPOAs for finance and health, although they'll charge for doing it.

Hi
Sorry for the loss of your Dad.
You are absolutely right to be thinking of financial planning, new will and POA.
You can do POA yourself. It is very straightforward. The forms are on the Internet and also information for completing them. I did this for my Mum. I found it easier to print the forms and complete by hand. They will need to be signed and dated anyway and you will need an independent witness to sign as well. Then they can be posted (signed for). Do take a copy before posting. It is very important to complete both POA’s - “Health and Wellbeing” as well as “Finance”. Take a look online and then if you feel you can’t do this you can get a professional to complete it.
Do you or your mum know anyone who has used a solicitor for Finanacial planning/Will writing ? Ask around and try and get a recommendation of a company. It may be that the family house can be put in a Trust. If mum ever should need a nursing home placement the home may well need to be sold to pay for this. Financial planning ie “Trust” can safeguard the home.
I hope you can find a good company to assist you with this.

Do the PoA yourself, it is easy. At 70 you can talk to an IPA but my advice to your mum would be-spend, spend, spend! Ideally your dad’s assets should have come to you/siblings but it’s too late for that so I would encourage your mum to enjoy life. The whole lot could go on care home fees.

Thanks so much,this information is very useful. My mum has already decided that both myself and my sister will be on POA for both health and finances. I will look into downloading the forms and doing this ourselves.
She has an old will, but so far has been waiting over 3 weeks for a letter from her solicitor, hence the need to look for someone more reliable. As far as I know this solicitor holds my Dads will,of which I believe I, along with my brother are listed as executers.neither of us has heard from her so I'll give her a call on Tuesday. Mum is in London, so I will look at the company recommended.

I am so sorry for your loss.

Has your mother ever dealt with the financial side of things before? Mine hadn’t, and even after several years she is still not great at managing bills etc. I would suggest having a talk with her about whether it would be helpful to set up a separate account for bills to come out of by direct debit, so she doesn’t really need to think about them.
In terms of her income going forward, would it be helpful for her to be paid a monthly ‘salary’, to help manage cash flow?
It is probably also worth your working out how much she will have coming in, so you can reassure her that she can afford things. My mum is paranoid about running out of money, but in fact she has plenty.

The Society of Later Life Advisers (SOLLA) may be helpful for you to find a financial adviser who specialises in this area of financial planning and advice.

https://societyoflaterlifeadvisers.co.uk/

We did this recently. Many solicitors will do a will included in the price of a POA.

i advise doing it with a solicitor if you can afford it. We contacted Hourglass who gave us a list of solicitors specialising in working with the vulnerable and elderly. That solicitor also recommended a financial planner.

getting the documents properly signed and witnessed by a solicitor is invaluable if you’re ever challenged. You’d be suprised what happens when money is involved, you need to cover yourself by crossing every t.

She needs to do a will asap as if something happened to her, intestacy rules would apply and her money may not end up where she wants it to, in fact highly likely not to.

She needs a POA but if simple you can do yourself on line for her. She will need to decide whether she wants all decisions by you and sister to be made jointly or if one can act independently. I strongly suggest you get this started as ours recent took 7 months. Excuse being lag from the pandemic 🙄🙄

If you use an IFA, consider paying one off advice fee. Frankly if she needs to invest money then just consider tracker funds which are cheap and track the market. However, that may not be suitable and they will advise.

Please don't let anyone sell her a funeral plan. This is the latest scam trying to convince people with plenty of funds they need one!

If your mum and dads funds and house were in joint name, then probate should be fairly simple

Good luck

She needs to do a will asap as if something happened to her, intestacy rules would apply and her money may not end up where she wants it to, in fact highly likely not to.

But she has a will. The OP said she wants to update it. No need to panic the OP. It absolutely needs checking but it’s probably still ok - most people write their will to leave to a spouse, then children after the death of the spouse.

Thank you for all the links and info.some very good advice. Will have a good read up up on all of this over the weekend and get an appointment in place for next week. X

@julesover40 before you pay for an IFA how much are we talking about?

My advice is:

• set up a second current account possibly with you and your sister as joint signatories. This can be used to pay bills by DD, enables you to buy things for your Mum without her needing to pay you back. Keep a spreadsheet so it is transparent how money is being spent.
• set up a new email for your Mum. Use this for all household bills etc. This way you can help manage providers, Direct Debits etc.
• work out your Mums new monthly income and put a STO in place to pay into the new current account to cover monthly DD and annual payments e.g. insurance.
• NS&I is not limited by the £85k maximum so consider using them to gather savings, insurance payouts etc. to give you breathing space.
• ISAs are a good idea as you don’t pay tax on the interest. You can put £20k per tax year.
• List all investments, savings etc. and then you have a handle on the size of her assets and can then start to look at how best to invest them.

HTH.

I'm very sorry for your loss, my father died seven months ago at the age of 88 leaving my mother, who is in the early stages of dementia, so I understand what you're going through.

"We're not talking huge amounts on money, maybe a few hundred thousand plus the family home."

Having said that, I really am sorry but "a few hundred thousand" on top of a family home is in no way not a huge amount of money.

In this situation, assuming that your mum's will says that everything goes to the children, then anything over £1 million will be subject to inheritance tax at 40%.

I don't know what exactly you mean by "a few hundred thousand" but let's assume that it's about £300k. That's on top of the value of the house. Do you have any idea of the current value of your parent's home?

Let's say that the home is currently valued at £1 million. So, in this example, if your mum were to pass away tomorrow then HMRC would expect the executors of the estate to pay £120,000 in inheritance tax.

However, this can be reduced if she makes gifts to her children and she survives for more than seven years. In this case these gifts are not counted as part of her estate and so will reduce any inheritance tax payable.

So, you have a bit of a balancing act to perform (if you are at all concerned about paying inheritance tax - if you don't care about it then don't worry).

As others have said, you really do need to speak to a qualified advisor about this. They should recommend a mix of investments, some of which concentrate on capital growth and some which concentrate on providing income.

This will provide an income for your mum and also the capital growth will then mean that, in the future, more can be placed with the investments that concentrate on providing income so that your mum's income is inflation proofed.

It's similar to a pension. You can either get a larger amount that is a set amount every year or a lower amount that is index linked and will increase over the years with inflation.

If your mum's situation allows for it then it may also be worthwhile at some later stage of her making gifts to the children to reduce any future inheritance tax liability. Don't forget that it's 40% on everything above £1 million.

Not quite the same, as my father died nearly 20 years ago. But my sister died unexpectedly last year and that accelerated my mother's cognitive decline (she's 90).
My brother and I are my sister's executors. Fortunately, her paperwork was well organised. But what that did make us aware of, in relation to our mother, was the importance of knowing what there is and where.
We have activated the Property & Finance LPA for her, which was set up about 10 years ago
So we now have a spreadsheet for my mother's income (several pension sources); expenditure (as many bills as possible on direct debit); assets (we've moved her various small savings pots plus what she has inherited from my sister into savings accounts with better rates); and liabilities.

Look for a chartered accountant with experience in Inheritance planning, tax advice, probate etc etc

@julesover40

I've just been through a lot of this. I'm a few years younger than your mum, but we have a financial adviser and portfolio and have had it since 1997. Therefore we are not all averse to financial management. We have regular meetings and a defined financial strategy. We possibly have more money though. We started with Private Banking and now have a wealth management company via them. You could just invest via the internet!

We used a solicitor for wills. We have given away a lot of money and will give more to reduce IHT. We have set up LPAs for finance and health. One of our daughters is Attorney, You and Yours on Radio 4 reported recently how difficult it is to manage joint Attorneys. I have been my DMs Attorney and it's awful. The processes are slow. Months. Just do one of you with a substitute.

It's worth talking through the LPAs with a solicitor. They are another sounding board. There's a long waiting time for LPAs so do them quickly. Ditto a will. Then talk about gifts if appropriate.

DM was self funding. In a care home. If the state pays you won't get the best ones. So think very carefully about what you would want for DM. It matters.

If you put DMs property into a trust, she no longer owns it. The trust does. Is it worth it?

We have set up LPAs for finance and health. One of our daughters is Attorney, You and Yours on Radio 4 reported recently how difficult it is to manage joint Attorneys. I have been my DMs Attorney and it's awful. The processes are slow. Months. Just do one of you with a substitute

having recently been through this I would not advise one child as attorney. Either employ an independent one, or have joint attorneys.

the sibling with POA simply emptied the bank accounts into her own. No records, no receipts. Because she was sole attorney no one could figure out why the donor had no money- all accounts were changed to manage online, so no statements in the house. It took years to unravel, and the fall out was immense. OPG did investigate, but then the donor died so that ended their investigation.

you can have joint attorneys where they can act independently, so they don’t have to consult to make a decision. Then at least both can see the other is acting correctly, even if only one is managing the finances/health.

You and Yours reported big issues with joint attorneys. I don't expect my dd to do anything illegal. She is a barrister. Other dd didn't want to be an attorney. We are open about money so no one will be breaking the law or stolen from. Evan as sole attorney it's been a PITA for me. Most organisations I've dealt with have been difficult and slow. Most don't do what they say they will. They ask for info and then, after it's been provided, ask for more. In fact several have no info on their web site about working with an attorney at all. You have to contact the bereavement dept. it's been a shambles.

There is so much to think about, I do appreciate all the comments and especially sharing your own experiences.
I will be with mum later on today, so I think we will look at theses responses and have a talk about how she wishes to proceed. X