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?

OP has said:

"...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?"

I assume she meant "probate".

OP, you've said you are sole executor.

Who is handling the application for probate? Is it you or are you employing a solicitor or probate company to complete the application forms for probate?

Your friend is weird

It depends on POA. It can be given in different circumstances and doesn’t mean the person giving it lacks capacity. This person may just need another one to be able to do legal acts in its name and it’s done all the time outside of care and dementia context

Tbh I don’t think that will look as bad as OP thinks. ‘Her mum’ regularly lent OP money which she always paid back, it just so happens that at the time of her death there was still £250 outstanding.

Yes. You are missing the fact that it wasn't OP's money. This money was not for the OP' personal use.

Well the "private etc" makes no sense. Presumably there is a solicitor involved who will make a record of any gifts made in the last 7 years as that is relevant to liability for inheritance tax.. You need to make it clear, showing them payments back in if necessary, what were gifts from your mother and what were repaid loans. If there is an outstanding debt - you say £250 - tell them now.

As long as you account properly for any tax that needs to be paid and are fair in division of assets with anyone else named in the will there is no problem.

If you have been helping yourself to large amounts of you mother's money then the solicitor may have a duty to do something but it would be hard to prove.

Which the OP could enter on the probate forms as an outstanding loan.

I hope the OP is aware that she should open an ad hoc executor account (most banks will do these) which is used solely for the purpose of managing the estate until the estate has been wound up and that she will need to prepare an account for the estate.

"An estate account, or executor account, is a special bank account opened by the person managing a deceased person's estate (the executor or administrator) to collect, manage, and distribute the deceased's assets, paying off debts and taxes before distributing the remaining inheritance to beneficiaries, acting as a central, transparent record of all money in and out. It's crucial for fulfilling legal duties, safeguarding assets, and preventing disputes by showing exactly how the estate's funds are handled until final distribution, "

OP hasn't clarified who is handling probate and settling the estate. It's not always necessary to use a solicitor or a probate firm for a straightforward estate, even if a house sale is involved.

It is financial abuse because you have power of attorney but you have paid it back. Just don’t do it again.

OP has said there is still an amount (£250) that has not been paid back.

Have you definitely repaid every last cent? If so, your friend is talking nonsense - legally there has to be a dishonest intention to permanently take the money for it come near the definition of theft.

I really think OP needs to clarify who is doing the probate forms - herself, as sole trustee or a solicitor/bank/probate company.

Yes you should never have abused the power of attorney in such a way that you borrowed her funds intermeddling yours and hers. Your friend is right is could be viewed as theft. Just return the funds now to her estate. If you don’t and the fund transfer from her to you comes to light it will be harder to explain. You would have been well aware of the responsibility as attorney frankly to take money from a confused relative is theft.

At the point of mums passing I had paid back £250 of a £500 loan.

What loan? She didn't loan you anything. You said yourself you took it without asking. You know it was wrong which is why your conscience is bothering you now.

She hasn’t mentioned trustees at all. She has said she is the sole executor.

She might have appointed a probate solicitor to do the probate, but she hasn’t said.

I don’t think she’ll be back - too many posters happy to stick their boot in (and post misinformation) when OP already knows she’s in the wrong.

Someone she is concerned about is looking at the paperwork. Most people dealing with probate and selling a house will involve a solicitor, it's convenient. So it's a reasonable assumption that the solicitor is the "private etc" whatever that was meant to be.

Slip of the pen - I meant "executor".

Calm down. You are sole executor at your Mum’s behest. You continued a pattern of lending that reflected her own behaviour pattern when she had capacity. You don’t owe her estate anything now. You and your sibling (who is not involved) are presumably the only beneficiaries. So far, so normal.

If your mother's estate is due to pay inheritance tax then you need to make an accurate return of all her assets. That includes the £250 you still owe her. You did not act properly by using her money as a personal bank while she was alive and it is possible that someone doing the estate tax returns will notice. I don't think it is a problem so long as you can show all monies you borrowed have been repaid, except for the outstanding £250 that needs to be included in the estate as money owing from you to your mother. I don't think you need to worry hugely about this so long as you can evidence the repayment of the loans, and I don't think you need to "confess" to anyone dealing with the estate paperwork, though you should answer any questions completely honestly. Assuming you are entitled to some of your mother's estate then you can pay the outstanding £250 out of that entitlement when the time comes to distribute, and of course that £250 should be taken into account whether or not an inheritance tax return is needed.

I highly doubt you are in big trouble unless the OPG is investigating your management under the POA.

"At the point of mums passing I had paid back £250 of a £500 loan."

There is a sum outstanding to the estate.

But since we don't know whether OP is going to be completing the probate forms and settling the estate herself or a solicitor or probate firm is in the process of applying for probate, on behalf of the estate, it's very difficult for anyone to offer advice. All we know is that she is sole executor and has a sibling.

Ah - i misread. I thought she’d borrowed each of those sums and paid them back. £250 is a small sum from a probate perspective. It’s the same as the annual gift allowance. I really think it’s a non-issue.

POA relating to Financial matters can come into effect anytime the Granter wants - either once it is registered or much later, only when the granter has lost capacity. In many, many cases, the former will apply and the Granter will ask the POA holder to do stuff for them, long before they lose capacity. Speak to utilities companies, change their suppliers etc. That often gets very difficult for elderly people - doesn't mean they don't have the capacity to know what they want - they just need someone to do it for them and POA allows all the companies we have to deal with on a regular basis to speak to the POA, which they can't if you don't hold one

OP IS the executor, so no issues there, unless she has outsourced to an accountant of course.

They can, just as they do for businesses, companies, self employed etc. A small percentage of such checks are random, but most are triggered by some strange action (lower than expected profit etc.)

Its unlikely that an estate with a property and £150K in savings, which may fall under the £1m max IHT nil rate (assuming a marriage etc..) would red flag to them, and in any case, as another poster has said, HMRC's interest is solely in tax, nothing further.

Its £250 out of an estate of £150K + presumably property - no one is going to think anything is adrift - OP could have paid herself some money to cover incidental costs doing things for her mum.

If OP and her sibling are the beneficiaries and OP is the executor literally nothing is going to happen, there is no one to raise a challenge, the tax man is the only party who could ask to do a spot check on the accounts, but they wouldn't be looking for £250, they would be looking for tax declaration errors.