UK investment account to pay for nursing home.
September 16, 2019 12:53 AM Subscribe
UK-finance filter. We will be selling my mum’s house in the UK. I’m her lasting power of attorney. I want to put proceeds it in a investment vehicle that pays out annually for nursing home costs and is otherwise hard to liquidate without notice.
After my dad died my mum moved into a nursing home; my dad did all of her financial management while he was alive. I’m her lasting power of attorney - I remotely manage her bank accounts from the US under this power. Upon her agreement I will be selling her house - her only significant assets - to pay for her nursing home costs. My mum will be giving my brother and I a small amount of the proceeds, but I want to invest the bulk (Say, approximately £400k) into the equivalent of a low-risk mutual fund with the proceeds of our house sale so that her nursing home can be paid for.
Requirements: I want it to be *hard* to spontaneously withdraw cash and I want it to notify me upon any attempt *before* the withdrawal happens. Essentially I want to protect her from exploitation or her ability to run down her only support. How can I do this? Is there something like a vanguard low-fee, non-actively managed mutual fund that can do this?
What other things should I be thinking of?
After my dad died my mum moved into a nursing home; my dad did all of her financial management while he was alive. I’m her lasting power of attorney - I remotely manage her bank accounts from the US under this power. Upon her agreement I will be selling her house - her only significant assets - to pay for her nursing home costs. My mum will be giving my brother and I a small amount of the proceeds, but I want to invest the bulk (Say, approximately £400k) into the equivalent of a low-risk mutual fund with the proceeds of our house sale so that her nursing home can be paid for.
Requirements: I want it to be *hard* to spontaneously withdraw cash and I want it to notify me upon any attempt *before* the withdrawal happens. Essentially I want to protect her from exploitation or her ability to run down her only support. How can I do this? Is there something like a vanguard low-fee, non-actively managed mutual fund that can do this?
What other things should I be thinking of?
£400k in a low risk fund is only going to pay maybe 2% or 3% after costs, which might struggle to meet UK nursing home bills
posted by el_presidente at 4:13 AM on September 16, 2019 [1 favorite]
posted by el_presidente at 4:13 AM on September 16, 2019 [1 favorite]
In the US, consulting an elder law attorney would be the next step, as there are a lot of specialized ways to optimally manage some financial and care situations. Ideally in the UK, it’s more straightforward.
posted by childofTethys at 5:06 AM on September 16, 2019
posted by childofTethys at 5:06 AM on September 16, 2019
You definitely want to be careful about this and also think through what happens if/when the money runs out. In the US there are complex laws about the assets of people who need government assistance to cover end of life costs. You will want to make sure you understand the ins and outs of the comparable rules in the UK.
That said, my one practical idea is that if you get the money from the house, the trick is that the account has to be in her name, with you have access as her power of attorney. The problem is that while you can spend the money, so can she if she access to the account. My thought is that the best way to keep her from mis-spending the money is not give her any direct access to the account (no check book, no passwords) and then arrange for a monthly auto transfer into her regular bank account to cover her expenses. However, this is her money and if she is still legally competent, you need to get her consent to let you do this. Currently I'm handling money for a elderly relative and she has gradually let go of needing control so I could definitely get her to agree to this arrangement - no idea what it might like between you and your mother.
posted by metahawk at 9:27 PM on September 16, 2019 [1 favorite]
That said, my one practical idea is that if you get the money from the house, the trick is that the account has to be in her name, with you have access as her power of attorney. The problem is that while you can spend the money, so can she if she access to the account. My thought is that the best way to keep her from mis-spending the money is not give her any direct access to the account (no check book, no passwords) and then arrange for a monthly auto transfer into her regular bank account to cover her expenses. However, this is her money and if she is still legally competent, you need to get her consent to let you do this. Currently I'm handling money for a elderly relative and she has gradually let go of needing control so I could definitely get her to agree to this arrangement - no idea what it might like between you and your mother.
posted by metahawk at 9:27 PM on September 16, 2019 [1 favorite]
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Then you just need to make sure the nominated account has something like two factor transfer authentication and that should be enough provided your phone or device is the second factor.
Other things: If you've not engaged with the UK care system before, and depending on your mum's assets, it's worth doing some research and possibly getting advice before you do anything like selling a house. There are pretty complex rules on what can and can't be covered by the state and how you manage her assets can make a huge difference to what she has to pay when.
posted by crocomancer at 2:41 AM on September 16, 2019 [2 favorites]