Power of attorney

[Grandad.Malky]

That would be true - but discussions have been regarding Care costs, so gifting money to avoid care costs is normally within the 7 years and can be countermanded by the local authoritites.

deliberate deprivation of assets i believe is the terminology i think that was s used.

 

there used to be set ammounts you could gift annually to children,grandchildren,@ weddings etc

 

Thank you, that’s the term I need.

 

http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/

[Bassman62]

I know we are going off topic here but what happens if the person “spends” all their money or gives it away ……… you may not believe this but my mother had a visit from someone ( from the council ) to check she was getting all she was entitled to and they advised her to get rid of some money to take her below the allowed figure.

My late father-in-law sold his old cottage that was given to him as a deed of gift by his brother, he knew he was dying so he disposed of his money.

We applied for my late Mother-in-law for rent and rate reduction after my Father-in-laws death, they wanted to know where the money from the house had gone.

It was great telling them it was nothing to do with them as the house was solely his, the cheque from the house was in his name as was the bank account that it was paid into and he disposed of the money before he died, I was able to place house documents, bank statements and death certificate on their desk the look on the clerks face was brilliant to see, we'd beat the system and there was nothing he could do, the people in the queue behind me all burst out laughing saying "well Done".

My Mother-in-law lived rent and rate free from then on.

[orbs]

my husband & i have a will for tenents in common. i left my share of the house to one son my husband left his to another. i understand the house cant be sold doing it this way

[chimay]

my husband & i have a will for tenents in common. i left my share of the house to one son my husband left his to another. i understand the house cant be sold doing it this way

 

I understand though that if the surviving husband/wife wants to sell the housethey need the son who inherited the house to agree to sell and he would also get half the profits.

[pinner]

The posts above are confusing three quite different schemes- a perennial problem with laymen's guesswork.

1. ORDINARY POWER OF ATTORNEY: X gives Y power to sign documents and deeds, within the extent of the Power. Problem: it stops working if X loses mental capacity.

2. ENDURING POWER OF ATTORNEY: it continues working if X loses mental capacity but, at that stage, it needs registering with Court of Protection. EPA can cover property only. New EPAs cannot now be creates- replaced by scheme 3 below.

3. LASTING POWER OF ATTORNEY: it continues working if X loses mental capacity. It needs immediate registration with Court of Protection. LPA can cover property only; or health & welfare; or both.

 

EACH stops if X dies or (whilst of capacity) revokes it.

[StevePett]

Goodness me. what a lot of confusion!

 

There is a video about Lasting Power of Attorney at LPAuk.com and a free book on Asset Protection through Asset-Protection-Secrets.co.uk - pinners note about Powers of Attorney is correct as far as it goes.

 

Gifting part of a house to a child during life or on death can make a gift of half of it to a divorcing spouse who can potentially force a sale, so PLEASE don't do that!

 

There is a lot you can do to protect a house, but it needs to be done as far as possible in advance, or the "deliberate deprivation" rules may be used to recover the money from whoever was given it - through the Courts if need be!

 

Severance of tenancy can help as part of a plan for a couple, but there are better options.

[StevePett]

"my husband & i have a will for tenents in common. i left my share of the house to one son my husband left his to another. i understand the house cant be sold doing it this way"

 

Hopefully the Will leaves the surviving partner with a lifetime right of residence? If not, I would advise a Codicil to do that or things could go badly wrong.

[StevePett]

It also means that one son (or indeed both) may get nothing if the parent gifting to them has gone into care and the Council has registered a charge on the property.

I am not a property lawyer, but it is my understanding that a joint owner (or their creditors such as ex-wives) can force a sale.

[StevePett]

"I understand though that if the surviving husband/wife wants to sell the housethey need the son who inherited the house to agree to sell and he would also get half the profits."

 

Not just half of the profits, half of the proceeds so the surviving parent could probably only afford to move if the son agreed to continue to leave his money in the home, and subject (of course) to the sons creditors (if any) agreeing.

[StevePett]

"Originally Posted by Malky

I know we are going off topic here but what happens if the person “spends” all their money or gives it away ……… you may not believe this but my mother had a visit from someone ( from the council ) to check she was getting all she was entitled to and they advised her to get rid of some money to take her below the allowed figure."

 

If the local authority think that this has been done unfairly, they are entitled to refuse to pay care fees, or to sue the people the money has been given too for its return. And it could well be considered as a deliberate attempt to commit fraud.

 

"there used to be set amounts you could gift annually to children,grandchildren,@ weddings etc" - as was pointed out, this is from the rules on Inheritance tax which affects anyone with assets over £325,000 or for married or civil registered couples who leave everything to each other (which will NOT happen if their is no Last Will in place) who get the double allowance of £650,000 on the second death.

Under the rules of IHT, each person can give:

£3,000 to one person each tax year (cheques must be CLEARED during the tax year)

£250 to everyone in the world (if they wish!) except the person who go the £3,000 or any part of it.

UNLIMITED GIFTS which are made out of "normal expenditure" - so if you net income is £1m a year, and you only spend £200,000 on living and normal expenses, and always have done, then you can get into the habit (it needs to be a habit) of giving away as much as £800,000 a year inheritance tax free.

Financially lesser mortals can make gifts of up to £325,000, but they have to survive for 7 years before it falls out of the IHT net.

And there are amounts for weddings, which I can't remember offhand BUT they are smaller than one might expect and MUST be given within days of the wedding and conditional on it.

So now you know!!!

More info at Inheritance-Tax-Secrets.co.uk if you are fortunate enough to have an IHT problem!!