Thistle, my opinion is that is is wise to treat offspring fairly when it comes to major gifts. As you are responsible for her finances do you have LPA for her? That means acting in accordance with her wishes and her best interests, so I don’t think you have a choice.
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Bereavement
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I lost my mum due to dementia too.
and would get tearful over the worry that the council would find out. I think your dad's behaviour is a phase of the grieving process.