Any conveyancers here? It's a gifted money question

[Mortishafied]

Dm gifted us a substantial amount (45k) when she sold her house a couple of years ago. She wants to help us move.
Since then she deteriorated and needed more care. Falls being the worst but also starting with dementia. So is in a care home she loves.
We were buying a house with cash using this and our own money. She signed at the conveyancers/solicitors before going into the care home to say she has no claim on the money.

Dm is self funding. We have it in writing from the council the gift was when she was well and they won't chase it.
The first house fell through. So we are going for another. They want dm to sign again but say because she's in a care home she needs assessing for capacity. We contacted her GP they don't do it now. She has fluctuating capacity especially if she has a uti but is adamant about this money. We daren't tell her about this hiccup she'd be so upset.

We're at a loss as what to do. Any advice greatly appreciated. The conveyancer is talking as if she's never come across this?

Should we just give up? We'll lose this house. But can't think of a solution?

Have you posted about this already?
There are 2 issues.
Can she sign an agreement that she’s giving this money as a gift at the time the gift is utilised?
Will she have enough money to pay her fees for the rest of her life?

Also, if she is self funding, why were the council involved at all? They only get involved when not self funding.

No haven't posted.
The conveyancer was querying it so we contacted the council to get verification.
She can sign but it's her capacity they want checking. It's who can do this. GP can't.

Am thinking of changing conveyancer for this sale then can just take dm in to sign. It was only when dh mentioned in chatting about the care home that they started querying it.

But youd have to declare her address, and as soon as the conveyancer realised shes in a care home, they’d likely dig deeper. What youre suggesting does smack of coercion now.

Also, who did you contact in the LA?

It was the finance department. It's not coercion she gave us it ages ago.

My MiL was assessed by the adult care bit of the social work team where she lived. Have you spoken to your equivalent team?

I don't understand the need for the original signature tbh. She gifted you money a couple of years ago, it went into your slush fund. She is self funding. Why even declare it??

It's because we had to show our bank statements. They wanted to know where a large amount came from.

She doesn't have a social worker now as self funding. The care home manager said she'd vouch she has capacity. We told her the situation because of the ss possibility? It's such a headache.

Also she has to say she has no claim on the house.

Didn't she sign a deed of gift letter when she gave you the funds? In any event, you could contact a private GP and ask them to do an assessment for capacity which I would expect your conveyancer would accept.

When did you receive the money?
Has it been in your possession since the house was sold?

We received it after she sold her home. We asked the GP to do a letter but they stopped doing this a year ago. Might be just our area?

Maybe we'll be staying here for now. It's not so bad. Be a shame to lose the house but can't be helped.

Your mother's mental capacity now is irrelevant. At the time she gifted the money to you she had the mental capacity to make that decision and signed paperwork to confirm the gift which is sufficient for the "source of funds" enquiry. Mental capacity is issue and time specific.
Unless the terms of the gift were that it was conditional upon you buying a specific house (which subsequently fell through meaning that ownership of the money reverts to mum) there is no need to ask your mother to confirm her intentions now.

Turns out they want a capacity assessment. Dm was so angry and upset that we've decided to pull out. We daren't tell her as she really wants us to move. She's too old to be what she feels is harassed over her own money and how she has decided to spend it.
I won't lie I'm gutted but putting on a front as her mh is paramount.