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Legal & money

Advice re using a father's funds to purchase car.

(21 Posts)
HUNTERF Mon 07-Jan-13 16:30:58

I have just returned from visiting a friends father in a nursing home. The son is 72 and has Power of Attorney in his favour.
The father qualifies for full NHS funding and is not having to pay any fees for the nursing home.
As a result the father's money is gathering at a rate of over £20,000 per year.
As no local nursing home would take the father he is in a nursing home 25 miles from where the son lives.
When the father entered the home he was expected to live for about a year but somehow he has managed to go on for just over 5 years and could go on for some time yet.
The son visits most days and his car has done 130,000 miles and it was new when the father entered the home.
Most of this mileage is as a result of visits to the home and running about for clothes etc for his father.
The son's car has just passed its MOT but the garage has warned him it will need some expensive repairs in the next few months and he is concerned he probably will not be able to visit as much as he has expensive petrol costs etc.
I was just wondering if it would be in order for the son to buy a new car using the father's money to enable these visits to continue?.
The son is the sole beneficiary of the father's estate and would rather use his father's money to continue the visits rather than have a bigger inheritance.
There is no reasonable public transport to the home.
If the son used public transport he would have to catch 3 busses each way and it would take 2 and a half hours. The son has done this a few times when there has been adverse weather conditions but it would be unreasonable to expect the son to do this every day in view of his age.
I have to admire the son for driving nearly 20,000 miles a year to visit and keep his father in the best state possible.

Frank

gracesmum Mon 07-Jan-13 17:08:45

Can you explain how he is not liable for nursing home fees with an income of £20,000 a year?
I am thinking that if he stands to inherit and is himself 72, I would just buy the car on an interest-free loan and pay it off when the father dies. Alternatively, the father would have to buy the car because if he gives the money to the son ,the son would have to declare it for tax purposes - as I imagine would be the case if he uses his father's money as that amounts to the same thing doesn't it?

HUNTERF Mon 07-Jan-13 17:27:16

Hi gracemum

As the primary needs of the father is health the NHS is liable for the father's funding regardless of the father's means.
The father is a danger to the public and has been sectioned under the mental health act by the NHS.

Frank

Anne58 Mon 07-Jan-13 17:30:08

Morally I see no problem in using some of the money to buy a car, but it might be advisable to look into the tax situation and perhaps for the son to take some advice.

jeni Mon 07-Jan-13 17:33:53

My bro bought a car to use to take mother out and visit her in. It got left to his dd.

HUNTERF Mon 07-Jan-13 17:44:53

With regard to the tax I will ask the son to take advice.
I supose it could be argued that in view of the mileage being done on behalf of the father it could be argued the new car belongs to the father even though the son drives it and the son will inherit it when the father passes away.
This situation is highly unusual. The father had advanced dementia when he entered the home and was expected to last 380 days maximum.
He is still alive 5 years later.

Frank

vampirequeen Tue 08-Jan-13 09:19:17

I see no moral reason why he shouldn't some of the money to buy a car but maybe a call to CAB might help to check the legal side.

Ana Tue 08-Jan-13 10:10:24

There seems to be no reason why he shouldn't buy the car in his father's name - the registered keeper doesn't have to drive it. The son would eventually inherit it anyway.

Nelliemoser Tue 08-Jan-13 10:12:04

If the son has power of attorney he does need to very careful that he is not seen to be misuig his fathers money. I would suggest contacting Age Uk for advice before doing so, and being modest about the type of car he buys.

In essence the same advice as every one else has given.

Nelliemoser Tue 08-Jan-13 10:13:25

misusing even! blush

gracesmum Tue 08-Jan-13 12:22:07

I'm thinking the father must be a good age if the son is 72? They would never get insurance in his name so would that complicate it if it is bought by the father?

Ana Tue 08-Jan-13 12:39:48

No - it doesn't matter who owns the car, but anyone who drives it has to be insured and have the owner's permission (which I am assuming the father would be able to give?).

HUNTERF Tue 08-Jan-13 13:52:40

Hi Nelliemoser

He is looking at cars which cost about £14,000 which I do not think is excessive these days.
The son does need automatic in view of ankle problems which is not surprising at his age.
Looking at my log book it does say the person is the registered keeper and may not be the legal owner so it may be possible to register the car in the son's name but the insurance company may have to be told the father is the legal owner and would be reimbursed in the event of a write off.
The power of attorney is worded reasonable expenses and in most cases I would say it is not in order for the son to buy a new car at his father's expense but this case is extreme. I am sure the father would want the son to have a reliable car to visit him.
I will sugest he has a word with Age UK and possibly the CAB.
To be honest I would be surprised if anybody would want to audit the expenses which the son has incurred on behalf of his father but there is a chance he could be spot checked.

Frank

glammanana Tue 08-Jan-13 14:02:23

The Power of Attorney and all that it entails would have surely been explained by you friends solicitor when it was signed,thats what he paid such a large amount of money for,so why doesn't he ask his solicitor there will surely be no further charge,I rang up various times on behalf of my late FIL and the sols where very helpful.

Nelliemoser Tue 08-Jan-13 14:22:13

Hunter It sounds a sensible idea but if it was me I would want it to be fully transparent to avoid any trouble with regard to all sort of things, his dads income tax etc. inheritance tax stuff etc etc.
My point about the value of the car was to ensure that as he has POA no one will accuse him of exploitation or potential financial abuse.
I assume the court of protection is involved somewhere or if "Dad" is on a section he should have some sort if independant advocate or such.
I hope he can get it sorted.

HUNTERF Tue 08-Jan-13 15:08:47

Hi Nelliemoser

According to what the son has said the Court of Protection rubber stamped the POA so it could be used nearly 5 years ago and the son was able to use the bank accounts etc.
The son has said he has kept accounts of what has been spent on behalf of his father but he has not had any communication in nearly 5 years probably because he had to submit a copy of the father's will to the Court of Protection and they know the son is the sole beneficiary of the father's will.
There have been no complaints from the home or other relatives.
If the father needs something the son has provided it by the next day or within reason if it has been Christmas etc.
I supose everybody knows the father will never recover so nobody is interested as long as the father's needs are being met.

Frank

HUNTERF Tue 08-Jan-13 15:15:40

Sorry Nelliemoser

If the son bought a car costing say £40,000 using the father's money I would say that would be abuse.
In my opinion up to about £15,000 would be ok under the circumstances as that is about the new value of what the son has now.
After all how many pensioners do 26,000 miles a year which is what he is having to do.

Frank

Movedalot Tue 08-Jan-13 15:52:22

To me it all sounds reasonable and as long as he maintains accounts I don't think he has anything to worry about because he is the sole beneficiary of the will so I can't see anyone else having an issue with what he is doing. I think the tax issue will only come in after the father dies and then it will be inheritence tax. Presumably the father is being taxed on his income at the moment.

A word with the CAD or Age UK won't hurt but I doubt he needs to worry.

HUNTERF Wed 09-Jan-13 08:59:39

Hi everyone

My friend has had a word with the Court of Protection and the woman could not see a problem with him buying a car with his father's money but she did say keep the paperwork and attach a note of his reasons for buying the car and also obtain confirmation of the mileage on his old car when he trades it in.
She said it might be worth obtaining the opinion of a couple of other family members but they are for him buying the car and they are not interested in the money or the type.
They have said it should however be automatic.
He is going to get a second opinion from Age UK.
Oddly enough the father saw the car in a lucid interval yesterday and he said it should be changed but we are not sure if he knew what he was saying.
As it happens the bodywork etc looks new.
I found out yesterday the father will be 100 in September so I think it is unlikely he will be interested in the money.
I think the problem is there are no written guidelines to cover this type of situation probably because it is so unusual.

Frank

HUNTERF Sat 12-Jan-13 07:51:04

Just for everybody's info my friend managed to get through to Age UK after trying several times.
Surprise surprise the woman at Age UK had never had a situation like it and had to call back after having a discussion.
She said there was no written guidelines covering this situation as it hardly ever happens.
She could not see buying the car would be a problem.
The point she did raise however was if the father did not qualify for NHS funding at any point and it went back to Social Services they might object to the purchase of the car.
The son knows the father will be funded for at lease 11 more months by the NHS and with the fathers income combined with his savings he will not run out of money unless he lives to about 115.
The son has decided to order the new car and is going to the garage today.

Frank

vampirequeen Sat 12-Jan-13 10:10:22

That's wonderful news. So glad it's sorted.