Selling up, nursing home etc etc.

I wondered if this is the place to ask this please? It's on behalf of person who has PoA for ancient Dad, who is now in a nursing home with early stages of dementia already passing/passed.

His house(his only one and his main residence) has now been sold to pay for his fees...280K This is to be invested and it is hoped interest plus pension plus a litle draw-down will pay fees (500.00+/week) for his forseeable future.

a) Is there a simple one best answer for investment of this sum?

b) Will the income derived from this investment be taxable (assume usual tax rates...89yo...wife died 5 months ago) Would be paying basic rate of tax on works pension plus state pension.

c) He has left a mountain of paper work indicating ownership of shares, stocks, bonds and gilts. There is little or no indication of those whose value has been realised. Is there an easy way for us unknowledgeable peeps to find out which is which?

d) PoA says that the mound in c) might be 20K's worth if it's all realisable, is any of this liable to CGT or any other tax? (Bearing in mind house value above) Assume realising there total value asap.

Other than that said ancient relly seems to be in reasonably good health for an 89yo with dementia. Many thanks for reading. James

Reply to
J L Williams
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No :-)

In a very similar situation in the family 2 years ago, one component of the 'strategy' that we invented was a 'purchased life annuity'. Part of the house sale proceeds were converted into a top-up pension, payable until death and designed so that expected living costs (including nursing home cost escalation) would be fully funded without having to touch the remaining sale proceeds, which have just been kept in a 'high' interest online savings account.

We thought (and continue to think) that was a smart idea simply because there was a family history of extreme longevity, and we wanted to 'buy out' at least some of that risk.

Possibly :-) Depends what it's invested in, and should be a secondary consideration anyway. I'd suggest you aim to keep things as simple as you possibly can, given our own experience of having to use an Enduring PoA to deal with the finance industry :-(

If original certificates are missing, and there's no sign of a solicitor/accountant/bank holding things in safekeeping, I think he'd have to write to the registrars of the issuing companies. Incidentally, it will probably be far easier to do this kind of thing if he can still sign his own letters rather than having to wield the PoA.

House should probably fall outwith CGT as sole residence; realisations of less than 32k (?) and profits of less than 8k (?) on the securities in a single tax year would also be exempt, I think.

The reason for realisation is.... simplification? There seems to be no burning need from a strictly financial pov.

Reply to
A Dodger

Usually, yes.

You may be able to see which ones still have investment income coming in. Otherwise you would need to ask them.

It may well be liable to CGT, depending on the circumstances, and the type of investment. It may be advisable to try to delay the sale of anything subject to CGT over and above the annual exemption, as there is no CGT on death.

Reply to
Jonathan Bryce

The message from snipped-for-privacy@b.invalid (A Dodger) contains these words:

As we understand it the PoA terminates at Ancient Relly's demise and this labour intensive work will fall to the chief executor (or his underlings) and that is a solicitor (whatever). His fees are considerable and have already been curbed by the authourity (watchdog) overseeing the fee base even though PoA had agreed terms.

There are round-about ( familial / moral / financial) issues as well as that indicated above that directs that any of his own money (savings, shares etc.) should be used before the house value. Otherwise no, you are quite correct. Very many thanks for your reply and time. Cheers james

Reply to
J L Williams

That's inevitable, I think

So change the will, or persuade the PoA to change the will? I'd be interested in other views as to whether an agreement on fees for administering an estate is enforceable anyway. A will is never a contractual commitment, is it?

You shouldn't need a solicitor to write a codicil appointing family members as executors - they can then decide, at the relevant time, whether they want to hire a solicitor to help them with the estate. Anything taking control away from the legal industry must be a Good Thing (tm) :-)

Reply to
A Dodger

In message , A Dodger writes

If the testator is not of sound mind, then are you sure that a codicil written by an Attorney removing a Professional executor and appointing family cronies instead would be acceptable?

Reply to
john boyle

The message from john boyle contains these words:

I am once (or is it twice?) removed from the actual situation but this Professional in particular was chosen because he is a recognised specialist in these cases (written books about it). It is complicated but a court was required to agree and establish this 'set-up'. I believe they (the court) accepted the proposed actions because the Professional was involved. I believe the family members involved have no wish to remove him but on the other hand would prefer to sort the investment issues now. Many thanks for you replies, thay have helped a great deal. Cheers jim

Reply to
J L Williams

In message , J L Williams writes

HI Jim,

I think you may have misunderstood because I was replying A Dodger's post not yors.

I am pleased to see that in the particular circumstances you describe the people concerned HAVE taken professional advice and have realised that in these circumstances of a demented testator you DO need legal assistance and the approval of a Court to write a codicil. Your comments that the court only gave permission gives credence to my view.

Going back to the main point, as the testator is still alive then the executor has got nothing to do with it, it is all down to the individual(s) who have been granted the PoA. They need to get a move on and do their work without external hindrance so long as they do so for the best interests of the donor and do not make gifts etc., .

In my own case my sister and I took an aggressive investment stance and used my demented Dads dosh to form a company that he owned that bought property. It was a few years ago and worked well. Sadly he died after a year or so.

In the current climate I wouldnt recommend this so for the moment I would suggest that you look at how much cash will be needed to fund his care for the next (say) four years or so and keep this in cash. Take any pension income into account in coming to this answer. If there is any cash left for longer term investment then the individuals concerned have to take a view on whether to take a chance on investment or leave that in cash as well. For msyelf I'd invest the rest in equity linked collective investments.

Reply to
john boyle

The message from john boyle contains these words:

I realised that but saw that what had been done, actually fitted your description, following advice from said Professional :)

Yes, you are right there, on the button to be exact.... :)

Never mind you had his best interests at heart. It is heartening at this stage to see that this Ancient Relly is so well cared for, clean, warm and well fed. Even if he's unaware of it. Also the security of knowing that this could be so for almost ten years maybe...

You have confirmed the PoA's (layman's) view. I can only proffer the consideration of alternatives and also my time to investigate them. I only hope that I have such considerate offspring when my time comes :-(

Very many thanks indeed. Jim

Reply to
J L Williams

In which I had, it would now seem probably erroneously, assumed that the EPA had not yet been registered and that the donor was still sufficiently compos mentis. But it now looks as though the Court of Protection is already involved...

Our family is in the former situation - we are led to believe that any of the donor *or either of* the attorneys (appointed severally) are individually capable of 'dealing with' her assets. The donor *shares* power with them, and doesn't *give* it to them unless and until mental incapacity is admitted. And she's quite capable of revoking the EPA in the meantime, if her attorneys don't do a respectable job :-)

Yup, fair enough

Reply to
A Dodger

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