Am I in big trouble??

[Bigcoat1]

Hi Everyone,

i think I might be in big trouble. My mum passed recently. For the last 4 or 5 years I held power of attorney and handled all of her financial affairs. We never had a formal diagnosis of dementia etc, however she became Increasingly confused so I just took over.
mum was quite well off with around 150k in savings, an income of 2k per month and a mortgage free home. My finances have been difficult since my divorce.
On a few occasions I borrowed from mom’s account when I was desperate. I always paid the money back asap. I never discussed this with mum although I know she she would have consented.
her affairs are now being looked over as part of private etc and I’m terrified that this roll come to light and I’ll be in huge trouble.
I know I can’t undo what’s been done, but what should I expect to happen?

Yes, using the donor's funds for gifts is allowable:

https://www.gov.uk/manage-lasting-power-attorney/property-financial-affairs

Spending money on gifts or donations

Unless the LPA states otherwise, you can spend money on:

• gifts to a donor’s friend, family member or acquaintance on occasions when you would normally give gifts (such as birthdays or anniversaries)
• donations to a charity that the donor would not object to, for example a charity they’ve donated to before

You must apply to the Court of Protection for any other type of gift or donation, even if the donor has given them before. These include:

• paying someone’s school or university fees
• letting someone live in the donor’s property without paying market rent (anything they pay below market rent counts as a gift)
• interest-free loans

You must check that the donor can afford the gift or donation, even if they’ve spent money on these types of things before. For example, you cannot donate their money if that would mean they could not afford their care costs.

When you have POA you make decisions for a person based on what you know they would have done if they still had capacity. If your mother would have given you the loan then there is nothing to worry about.

You have to let it go. Your mother has passed away. The important thing is that you have not taken money after her death as the POA is now ineffective.

Also, when you say Private, do you mean probate? If so, they are not interested in the activity on an account. They just deal with what's left and with divvying it up according to your mother's Will.

An executor might look through the accounts to see how much has been given as gifts over the years, as inheritance tax can be affected. But in this case, they would see that the money had been paid back so not to be treated as a gift and would be most unlikely to query it. At least that's my understanding, I'm no expert but have had to look into it on my own account.

What do you mean by her affairs being looked over by ‘private’ etc.? Do you mean as part of the probate procedure?

But as pps have said, if you paid all the borrowings back, there’s nothing to worry about. TBH I’ve heard of elderly people being robbed blind by whoever holds the P of A, and nothing seems to happen to them!

My friend was POA for her mother who had dementia for around 3 years before she passed. My friend took money from her mother's account every birthday and Christmas for herself and her DCs and she would also send some to her brother for his DCs too. This was what her mother usually did for every Christmas and birthday so it was what her mother would have wanted. My friend also took money to pay for car repairs as she couldn't afford them and would have been unable to visit her mother without the car. Her brother was next to useless and hardly ever visited her. Her Mum would have given her the money to pay for the car repairs anyway, she kept receipts etc just in case. She was a bit worried the bank or her brother would cause a fuss but it was all fine and was deemed acceptable.

This was all absolutely fine and there was no problem with her estate.

Your friend is not being very kind to you. You have done nothing wrong and as long as the money is either all there or accounted for you have nothing to worry about either morally or legally. I'm so sorry for your loss too OP.

Op is the executor

Wow, there are a lot of people giving advice here without actually knowing very much.

It's entirely possible to use a POA for financial affairs while the donor still has the capacity to make decisions. I do it all the time for DM, who is disabled and finds it hard to do a lot of things. (A POA for health and welfare is different - that can only be used when the donor is unable to make decisions).

It's illegal and unacceptable for an attorney to lend themselves money from the donor. Other posters have linked to good sources of info about that.

Having said that, I have every sympathy for OP, who has been in a difficult position and doesn't seem to have done anything that her mum wouldn't have agreed to. OP has had some harsh criticism on here, but I think she has repaid the money honestly, has not harmed anybody, and has not necessarily been fully aware of the rules she was breaking.

I don't know how likely OP is to get any repercussions for this. But I really hope she doesn't and I wish her all the best.

With the utmost respect, I struggle to see how they can prove or disprove your DM consented to these loans. Given these have always been repaid, all that can really be proven is that you had an informal and undocumented agreement. Is it ideal? Ofc not. But I think your friend is being quite insensitive here. That’s of course taking this all at face value and assuming you have (as stated) repaid everything, every time - for which there’ll be a clear and reportable audit trail via bank statements.

I think OP has said that at the time of her mother's death, she still owed (what is now her late mother's estate) £250.

Thanks, I missed that. Hopefully it will work out OK.

You abused your position. Your mum’s account wasn’t there as something for you to fall back on. You’re feeling guilty because you know that you shouldn’t have done it. Personally I wouldn’t have borrowed it without making sure that someone else was aware of what I was doing. I doubt you’ll get in trouble but you know it wasn’t the right thing to do hence your concern now her account is being reviewed.

No, financial POA isn't dependent on the person not having capacity. My brother and I had POA for my mum who was as sharp as a tack, but was physically unable to carry out her banking due to her stroke.
I was in the process of selling a property when I went away on a pre-arranged holiday. If things had moved quickly, a document would have had to to be signed by me with 'wet ink' (so not digitally) but as my daughter's have POA with my permission, one of them could have signed in my absence.

It's the health LPA that only comes into action when the person doesn't have capacity.

Sorry to be blunt, but she’s not able to tell them she didn’t consent as she died. Just say she consented and if you paid it back then you have nothing to worry about. If you took large chunks of money without paying it back then yes that’d be theft

Easy enough to resolve.
People pass with debts outstanding one way or the other all the time.

My s/bils were skimming off mil accounts for a car and for their own groceries etc. Total scum, n/c now before mil died.
Complete shit bags, but if you were paying back OP there should be a problem.

Indeed.

And it is part of the trustees' duties to recover any debts. OP is the trustee of her late mother's estate.

OP did post the exact same thing not long ago and got the exact same replies funnily enough.

OP you have still abused your power as POA. Your Mother did not and could not consent to loaning you the money, whether she would have if she had capacity is another issue. I doubt you will be in trouble as you repaid it but it was not a good thing to do.

Probate has just been granted on my mum's estate. Not a single question had been asked about how my brother and I managed her funds, despite some payments being made directly to us. My brother and I never make any transaction without consulting/informing the other, but we didn't keep official records.

Probate is basically about what tax is owed, and is proof of the deceased's financial position on death, which the executor then uses to allocate the funds according to the will. That's it. I thought there was more to it, but there doesn't appear to be.

Bil had power of attorney he had no qualms in mil's accounts as he saw fit. Total scum, he won't feel guilty at all, he didn't even like her.

I have PoA for both my parents one of whom has capacity and the other doesn’t.

I have kept spreadsheets of all their incomings and outgoings in that time, a well as my own personal, private finances.

So any movement of money between us - eg if I paid for a repair from my own account on their behalf and my mother paid me back - is all clearly labelled.

Please don't worry. Your 'friend' is being awful by giving you such horrible, upsetting and incorrect advice. Perhaps stop discussing your financial issues with them?

All you need to do, in the unlikely event that anyone asks, is say your Mum was happy (and verbally agreed) to these small loans to you. And you always paid them back.

Then have a list ready of all the loans you received and the dates you paid them back. Plus bank statements as evidence of this.

This is a very minor issue involving very small amounts of close family money. No-one is going to be interested in this.

I am so very sorry for the recent loss of your Mum. I'm sure she was very grateful for all your loving care, and would not want you to worry about this.

it seems by the time of her mums passing she ahd only paid back half of the money

Just stop saying that your mum did not consent
Your mum loaned you money, you paid it back. That is all.

Well I’d go crazy if I had the money to help my child in difficulty and couldn’t because I was elderly and they had POA. It will be going to them in the end anyway and OP was obviously the main carer which is no easy feat with dementia.