Selling up, nursing home etc etc.


J

J L Williams

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
 
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A

A Dodger

J L Williams wrote: said:
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?
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.
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.
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 :-(
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?
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.
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.
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.
 
J

Jonathan Bryce

J said:
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?
Not really.
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.
Usually, yes.
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?
You may be able to see which ones still have investment income coming in.
Otherwise you would need to ask them.
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.
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.
 
J

J L Williams

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?
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 seems to be
no burning need from a strictly financial pov.
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
 
A

A Dodger

J L Williams wrote: said:
As we understand it the PoA terminates at Ancient Relly's demise
That's inevitable, I think
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.
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) :)
 
J

john boyle

A Dodger <a@b.invalid> said:
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.
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?
 
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J

J L Williams

The message <DOIA$9AMjNBDFwOS@johnboyle1.demon.co.uk>
from john boyle said:
In message <YEaNM5oO2hGZlwDA8DhvxA@LIVING>, A Dodger <a@b.invalid>
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?
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
 
J

john boyle

J L Williams said:
The message <DOIA$9AMjNBDFwOS@johnboyle1.demon.co.uk>



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.
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.
 
J

J L Williams

The message <PDKTcBGFARBDFwvZ@johnboyle1.demon.co.uk>
from john boyle said:
I think you may have misunderstood because I was replying A Dodger's
post not yors.
I realised that but saw that what had been done, actually fitted your
description, following advice from said Professional :)
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., .
Yes, you are right there, on the button to be exact.... :)
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.
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...
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.
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
 
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A

A Dodger

john boyle wrote: said:
I think you may have misunderstood because I was replying A Dodger's
post not yors.
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 :)

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.
Yup, fair enough
 

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