Question about Power of Attorney and moving into mother's house

[Daniel777]

Hi,

I have a couple of questions in the area of Power of Attorney and wills. I don't have all the facts at the moment as my wife has only just brought the matter to my attention.
We are in our 50's and my wife has two brothers - we'll call Pete and Jim.

Their widowed mother, mum, who lives in her own house has recently been showing signs of dementia and has granted POA to Pete who lives nearby. I don't know if this is lasting POA. My wife and Jim live a few hundred miles away.

As we understand, mum put in her will several years ago that the house would be shared between the 3 children upon her death. She does not want to go into a care home and my wife has already said that she can come and live with us.

Yesterday, we found out that if mum comes to live with us, Pete will sell his house and move into mum's house. Pete and his wife work full time and have no children. I work full time and my wife does some part time work. We have 3 children, as does Jim.
We would like to impress on mum that it would be better if she sold the house before she died and the proceeds distributed equally between the 3 children. That would obviously give us financial support when taking care of her; and we would also avoid CGT (I think).

We are afraid that if Pete moves into mum's home, we will be unable to sell the house while he is alive and thus not receive our share.
As mum's mind is now quite feeble, we don't know if Pete has been doing other things, such as persuading mum to change her will. How can we check if this has been done? Can we approach mum's solicitor and ask about the will?

Can Pete just move into mum's house without my wife's and Jim's agreement?

Thanks,

Daniel777

[enaid]

Re: Question about Power of Attorney and moving into mother's house

Hello and welcome to beagles Daniel.
I have to say I am no expert by a long way on these matters and someone who may know better will be along soon to answer the legal areas of your question.
I should think that if Pete sells his home and wishes to move in your mums house then the other 2 should get 2 thirds the market value from the house,( I am assuming the house is paid for), the money for this coming from Pete.
Also I do hope you have taken all considerations about having mum come live with you, especially as you have 3 children as well.
I do suggest you have a good read about Dimentia and how it progresses although mum will seem quite able to be part of your family at present that may not always be the case. I do know something of this as my dad suffers with it. I hope you don't take my comments the wrong way, but if in the future she does need any kind of accomodation and the authorities think she got rid of her assets to avoid costs they can go back a long way and whoever received the capital will be responsible.
I am just trying to help you look a little into the future and how you will cope.
Enaid x

[CYNthesys]

Re: Question about Power of Attorney and moving into mother's house

Generally speaking powers of Attorney cannot be acted on if the donor loses mental capacity.
If an Enduring Power of Attorney (EPA) is in place and mum is no longer capable of managing her property and affairs the EPA would need to be registered with Court of Protection, and her Attorney would be held accountable to the Court.

I'm not up to speed on Lasting Powers of Attorney, as they were only introduced when the Mental Capacity Act 2007 came into being.

[Daniel777]

Re: Question about Power of Attorney and moving into mother's house

Hello and welcome to beagles Daniel.
I have to say I am no expert by a long way on these matters and someone who may know better will be along soon to answer the legal areas of your question.
I should think that if Pete sells his home and wishes to move in your mums house then the other 2 should get 2 thirds the market value from the house,( I am assuming the house is paid for), the money for this coming from Pete.
Also I do hope you have taken all considerations about having mum come live with you, especially as you have 3 children as well.
I do suggest you have a good read about Dimentia and how it progresses although mum will seem quite able to be part of your family at present that may not always be the case. I do know something of this as my dad suffers with it. I hope you don't take my comments the wrong way, but if in the future she does need any kind of accomodation and the authorities think she got rid of her assets to avoid costs they can go back a long way and whoever received the capital will be responsible.
I am just trying to help you look a little into the future and how you will cope.
Enaid x

Hi Enaid. Thanks for your welcome.

I suspect Pete's home is worth around 140k while mum's is worth about 300k.
Yes, it is paid for.

When you say, 'the other 2 should get 2 thirds the market value from the house', do you think we would we be legally entitled to our 3rd as soon as he moves into mum's house?

I quite understand your comments. I think looking after mum should be split 3 ways. At the moment, only we have offered, and she is scared stiff at the thought of going into a care home.

It's still early days but Pete is a bit of a loose cannon. Mum is a little scared of him and would quite easily give way to his suggestions.

All we want is fairness and not have my wife subjected to some long, drawn out family battle!

Cheers,

Daniel

[Budgie]

Re: Question about Power of Attorney and moving into mother's house

Hi Daniel and welcome to Legal Beagles.

Sorry, but I have a few questions to ask you first.

You say M.I.L has been showing signs of dementia and that she has granted POA to Pete !!

Do you know how long ago this was done, is it an enduring power of attorney or a lasting power of attorney and if it's lasting power of attorney then is it a property and financial affairs or health and welfare version ( or both )?

Whichever type of POA it is then do you know if it has actually been registered with the Office of the Public Guardian. The POA can only be used once it has been registered!

Have you or your wife actually seen the POA document ( the instrument )?

Who are the attorneys, there may be more than one, reserve attorneys, certificate providers witnesses, people to be told etc etc.

Were you, you wife, Jim not involved in putting the POA together.

Do you know what restrictions / conditions / guidance criteria were included within the POA?

Here's a link to the Office of the Public Guardian website which explains about these different POA's Enduring Power of Attorney - Office of the Public Guardian
.

Sorry, but we really need to establish the exact situation regarding the existing P.O.A. before we can even think about the other questions you have asked.

Rgds Budgie

Hi,

I have a couple of questions in the area of Power of Attorney and wills. I don't have all the facts at the moment as my wife has only just brought the matter to my attention.
We are in our 50's and my wife has two brothers - we'll call Pete and Jim.

Their widowed mother, mum, who lives in her own house has recently been showing signs of dementia and has granted POA to Pete who lives nearby. I don't know if this is lasting POA. My wife and Jim live a few hundred miles away.

As we understand, mum put in her will several years ago that the house would be shared between the 3 children upon her death. She does not want to go into a care home and my wife has already said that she can come and live with us.

Yesterday, we found out that if mum comes to live with us, Pete will sell his house and move into mum's house. Pete and his wife work full time and have no children. I work full time and my wife does some part time work. We have 3 children, as does Jim.
We would like to impress on mum that it would be better if she sold the house before she died and the proceeds distributed equally between the 3 children. That would obviously give us financial support when taking care of her; and we would also avoid CGT (I think).

We are afraid that if Pete moves into mum's home, we will be unable to sell the house while he is alive and thus not receive our share.
As mum's mind is now quite feeble, we don't know if Pete has been doing other things, such as persuading mum to change her will. How can we check if this has been done? Can we approach mum's solicitor and ask about the will?

Can Pete just move into mum's house without my wife's and Jim's agreement?

Thanks,

Daniel777

[Daniel777]

Re: Question about Power of Attorney and moving into mother's house

Hi, Budgie, and thanks for your reply.

I'm afraid I will need more time to answer some of your questions.

My wife is up at her mum's at the moment, and I'm afraid I am only getting snippets of information in dribs and drabs. She also finds it difficult to talk these things over with her mum.

MIL is 82 and generally in good health. A few months ago she started to get depressed and fearful - about dying, not being able to walk, losing her memory, etc. But, most of the time she isn't too bad. I used the word dementia, but maybe that is too strong a term.

My wife has been increasingly worried about her and is up there now for a week or so. Then, the idea was for MIL to come down to ours for a few weeks and hopefully cheer her up.

My wife only heard a few days ago from MIL that Pete had been granted PoA. But, I don't know if he is registered yet or if it is Enduring/Lasting. Maybe he is, because I think he was instrumental in transferring some funds when MIL sold her car recently. As far as I know, only Pete is PoA, but it is possible that Jim may be as well, and they just haven't told us.

And then yesterday, MIL told my wife that Pete would move into her house if she came down to ours for good, as she would be worried about leaving the house empty.
Unfortunately, we have trouble getting straight answers out of both MIL and Pete. MIL gets confused and Pete tends to be surly and abrupt.

Neither I nor my wife have seen any PoA document nor been consulted on the matter.
I hope I can get more information for you over the next day or so. I have asked my wife to contact Jim immediately and arrange for them to get together to sort it out.

Cheers,

Daniel

[Budgie]

Re: Question about Power of Attorney and moving into mother's house

No problem Daniel.

Sadly these things are always difficult.

You first need to establish if there is a POA in place ( registered ) or prepared and ready to be registered.

The POA application forms have to be prepared in a certain ( very strict ) way in order to protect the Donor ( your M.I.L. ). It would be highly unusual for other direct family members not have been consulted or included in the POA application in some way shape or form.

It looks like a meeting between your wife, Pete and Jim and your M.I.L is needed to establish the exact situation.

Fundamental to all of this is that your M.I.L's wishes and welfare ( both physical and financial ) are adhered to whilst she still retains the mental capacity to make decisions for herself and especially so, in the future, when she lacks the mental capacity to make those decisions.

The fact that your M.I.L is a bit vague about the POA is understandable.

The fact that Pete is surly and abrupt is, on the face of it a little worrying. However, it may just be that he is carrying out your M.I.L's wishes and that she doesn't want anyone other than him involved in important decisions about her welfare.

Please update us when you are able, we look forward to assisting if we can.

Personally, I am going through a similar scenario with my partner's Mother and can sympathise with the situation you find yourself in.

[The Debt Star]

Re: Question about Power of Attorney and moving into mother's house

Their widowed mother has recently been showing signs of dementia and has granted POA to Pete

Did Pete obtain a medical report on Mum prior to her signing the LPA? As you will know, only a person who is mentally capable can sign an LPA. The fact that Mum is deteriortaing does NOT mean that she cannot sign an LPA however. It is a question of capacity and degree. Hence it is always recommended that where there is any element of doubt, a report should be obtained. It would be interesting to know if Pete used a professional to have the LPA prepared, as there is a golden rule that medical opinion should be sought where there is doubt and the onset of mental incapacity gives cause for such doubt.

Has the LPA been registered with the Office of the Public Guardian yet? You should find out. You should also find out if Pete is sole attorney or if he is acting jointly or jointly and sverally with another person. Are there any replkacement attorneys? Are there any restrictions plcaed on the LPA by Mum? You need to find out.

As we understand, mum put in her will several years ago that the house would be shared between the 3 children upon her death.

Well, until she dies the will remains private and you should make no assumptions. The risk here is that Mum is put under pressure to make a new will, or perhaps makes a new will when she is not mentally competent to do so (eg she doesn't understand the full nature and extent of her estate, relationship to others or that she is even making a will, etc). Again, the golden rule is that a medical report should be obtained prior to her making a new will. You won't know any of this for certain until she dies I'm afraid.

However, regardless of whether she intends in her will to split the house 3 ways, you need to remember that, provided she has mental capacity, she can do what she likes with her own property and her assets are hers to do with as pleases.

She does not want to go into a care home and my wife has already said that she can come and live with us.

The main problem imo. Care home fees can be as high as £800-900 per week. Sometimes less, but certainly often in that range. It doesn't take long to wittle an estate away on such costs, assuming of course that Mum enters care via a local authoruity run care home,a s they are obliged to carry out an assessment of her capital and income.

If Mum gives away her home or any other assets, this will be treated as a deliberate deprivation of her capital for local authority care home assessment purposes. The authority will deem the value of such gifts to form part of her capital and, on that basis, refuse to fund her care should she enter a home.

The option of taking MUm in would solve this problem but, as you have stated, she is starting to lose her mental capacity and you do not know how long you may be able to manage looking after her.

Yesterday, we found out that if mum comes to live with us, Pete will sell his house and move into mum's house. Pete and his wife work full time and have no children. I work full time and my wife does some part time work. We have 3 children, as does Jim.
We would like to impress on mum that it would be better if she sold the house before she died and the proceeds distributed equally between the 3 children. That would obviously give us financial support when taking care of her; and we would also avoid CGT (I think).

Your problem is that Pete appears to be her sole attorney and, if so, he has direct control of her assets if she subsequently becomes mentally inacapble of managing her own affairs.. Until that point Mum can revoke her LPA but again, a medical opinion should be sought and professional advice obtained.

You would not be able sell the house unless you are Mum's attorneys, correct. Pete can, but will he?

Pete does have a duty to ensure your mother is properly taken care of and an attorney in dereliction of that duty can be removed but only by an order of the court.

Can we approach mum's solicitor and ask about the will?

The short answer is that you cannot access Mum's private affairs and information without her consent and, if she cannot give that consent, that's an end to it. The best you can do is put the solicitors and Pete on notice that you believe she has lost/is losing her mental capacity and remind them both that the golden rule on obtaining a medical opinion applies, as there is now a risk that she does not have testamentary capacity. When she dies you may be able to challenge any will she has drawn up recently on the premise of (a) her lack of capacity and/or (b) duress. However, the onus of proving either is on the party challenging a will and can be very difficult indeed.

Can Pete just move into mum's house without my wife's and Jim's agreement?

Not if she has capacity, no. If she lacks capacity and if pete is sole attorney under an LPA for her Property and Fianncial Affairs, then yes he can move in, provided the LPA has been registered with the OPG (an LPA cannot be used for a donor with or without capacity until it has been registered). However, Pete has a responsibility to look after Mum and that includes selling the house and investing the proceeds for her long term care if that proves necessary.

Hope this helps mate.

[Daniel777]

Re: Question about Power of Attorney and moving into mother's house

Many thanks for all your replies and helpful information.

The latest update from my wife is that she believes Pete is acting in good faith. If he does sell his house and move into mum's, he will give a third of the valuation figure to both my wife and Jim. They will be having a family conference in the near future to, hopefully, agree on sharing the responsibility of taking care of mum if her condition deteriorates.

At the moment, Pete is not registered as PoA and I have suggested to my wife that all 3 members of the family could be made PoA.

[enaid]

Re: Question about Power of Attorney and moving into mother's house

Many thanks for all your replies and helpful information.

The latest update from my wife is that she believes Pete is acting in good faith. If he does sell his house and move into mum's, he will give a third of the valuation figure to both my wife and Jim. They will be having a family conference in the near future to, hopefully, agree on sharing the responsibility of taking care of mum if her condition deteriorates.

At the moment, Pete is not registered as PoA and I have suggested to my wife that all 3 members of the family could be made PoA.

Indeed they can, myself and my sister are just waiting till the end of this month and hopefully the one we have done for our dad will be finalised. Budgie has also gone through this process for his MIL.
Here is the info all about it and to go about getting it set up
Lasting Power of Attorney - Office of the Public Guardian

Hope this helps Enaid xx

[Budgie]

Re: Question about Power of Attorney and moving into mother's house

Many thanks for all your replies and helpful information.

The latest update from my wife is that she believes Pete is acting in good faith. If he does sell his house and move into mum's, he will give a third of the valuation figure to both my wife and Jim. They will be having a family conference in the near future to, hopefully, agree on sharing the responsibility of taking care of mum if her condition deteriorates.

At the moment, Pete is not registered as PoA and I have suggested to my wife that all 3 members of the family could be made PoA.

Excellent news.
Having all three as POA's sounds a perfect solution and the family meeting will hopefully sort out the finer details of your M.I.L's future care.

However, the arrangement for the family home sounds a bit strange. The house currently belongs to your M.I.L. so is Pete planning to buy the house from her?
If so then in reality it is your M.I.L who will be gifting each of the children a third share in the house sale proceeds.
This, depending on a variety of factors, may or may not have inheritance tax / capital gains tax implications longer term.

I suggest that the three children co-operate and take some proper legal and tax planning advice on the possible implications of doing things this way. The main problem I see is that if your M.I.L has to go into a care home then the selling of her property and the resultant gifting of the proceeds will be considered a deprivation of her capital ( as Debt Star mentioned ).

If Mum gives away her home or any other assets, this will be treated as a deliberate deprivation of her capital for local authority care home assessment purposes. The authority will deem the value of such gifts to form part of her capital and, on that basis, refuse to fund her care should she enter a home.

The option of taking MUm in would solve this problem but, as you have stated, she is starting to lose her mental capacity and you do not know how long you may be able to manage looking after her.

Budgie

[The Debt Star]

Re: Question about Power of Attorney and moving into mother's house

If so then in reality it is your M.I.L who will be gifting each of the children a third share in the house sale proceeds.
This, depending on a variety of factors, may or may not have inheritance tax / capital gains tax implications longer term.

There are no capital gains tax implications on the sale or transfer of the family home because this is covered by the principle private residence exemption.

Inheritance tax shouldn't be a problem because the threshold is £325,000 and there is the transferable nil rate band available to widows (effectively creating a tax threshold of up to £650,000 on the death of a widow, provided the pre-deceased husband/wife had not made large cash gifts in the 7 years precedeing his/her death).

Of course the above is predicated by the circumstances of the case ie the value of the house in question.

The main problem here is that if Peter buys the house then it needs to be at market value as any undervalue is traeted as a deliberate deprivation of assets for long term care assessment purposes; and also the resultant sale creates a large cash pot belonging to Mum. If she gives any of that away in any significant amounts, then this also is a deliberate deprivation.

This is a really good opportunity to get estate planning advice, but not just from a lawyer - you should also speak to a financial advisor who specialises in elderly client investments (specifically long-term care planning).

[Budgie]

Re: Question about Power of Attorney and moving into mother's house

I was trying to keep matters on a very general level because we are not aware of the full circumstances of all the individual parties involved in this situation.
I repeat that 'in general terms' and mainly depending on the value of the M.I.L's total Estate and the families individual home and property ownership status there may or may not be capital gains tax and may or may not be inheritance tax issues longer term.

I think we are all agreed that independent legal and tax planning advice is the best course of action now for all parties involved with the primary focus being the immediate and long term care for the M.I.L. That advice should be sought before any action is taken with regards to the sale of the M.I.L's home !!!

[Daniel777]

Re: Question about Power of Attorney and moving into mother's house

Not much further news to report on, I'm afraid.

My wife is returning home today. I don't think her mum has dementia. She is still mentally capable but just gets very depressed and anxious. So, our main priority is to try and get her mental health improved.

We'll probably be going back up to mum's in a week or so to bring her down to ours for a few weeks.

Jim, the eldest, who retires this year, has now started to communicate and has even offered to take her in, which is good, as I think it would be too much for us to have her all the time.

My wife believes the will has not been changed and that Pete's motives are genuine. If they weren't, Jim would soon be onto him.

The conversation about Pete moving in/buying the house seems to have faded. I don't think he, himself, has really thought it through.

So, apart from the legal niceties about the house, hopefully, things will work out OK.

Thanks for your helpful replies. If any complications arise, I'll let you know.

Daniel