Deprivation of capital & care home costs - latest info?

[schmokin1]

One for the legal eagles amongst us!

Situation:

I am buying a house, mine and the wife's name on the deeds. We are borrowing all the money to purchase it.

In a few months my folks will be selling their house and giving all their children an equal sum, while retaining about 40% of their estate. Some of this remainder will be spent on converting an outbuilding on my new property for their use until they die or need to go into a care home or sheltered accom etc. They will still have a few hundred grand in the bank after giving away some of their money, and they are both in sound health and in mid seventies ie we hope years away from any possible care home requirement

Question:, can the authorities come after me for a share in my property some years later if care home fees exhaust my folks remaining estate? I'm prepared for a bit of a risk of this as the place has a really nice garage!!!!

TIA Schmo

[Lurking Lawyer]

They can't come after you.

They may, however, be able to treat your parents as if they still had the benefit of the sums given away and assess them accordingly, if the view was taken that it had been with a view to deliberately depriving themselves of it.

EDIT: Thinking about it further, the LA might in theory be able to pursue you if there was a shortfall following sale of your parents' assets. It depends to some extent on the length of time between gift and the obligation to pay arising.

If you're in any doubt, take some specialist advice. It's not a straightforward area of law.

Edited by Lurking Lawyer on Sunday 26th October 13:57

[schmokin1]

OK thanks. So I am right in thinking they can't put a charge on my house 'cos my parents 'improved' a bit of it, but they can take every last penny of my parents' estate for care fees instead of leaving them with a small residual amount...?

Cheers
Schmo

[phumy]

schmokin1 said:

OK thanks. So I am right in thinking they can't put a charge on my house 'cos my parents 'improved' a bit of it, but they can take every last penny of my parents' estate for care fees instead of leaving them with a small residual amount...?

Cheers
Schmo

My mum was in care for three years before she passed away this was three years ago that she died, and at that time the limit was £22.6k, so if you have over that amount they will expect to be paid, she was having to pay nearly £500/week. Then when you hit the £22.6k she then stops paying and the Government steps in an pays....

[vonhosen]

phumy said:

schmokin1 said:

OK thanks. So I am right in thinking they can't put a charge on my house 'cos my parents 'improved' a bit of it, but they can take every last penny of my parents' estate for care fees instead of leaving them with a small residual amount...?

Cheers
Schmo

My mum was in care for three years before she passed away this was three years ago that she died, and at that time the limit was £22.6k, so if you have over that amount they will expect to be paid, she was having to pay nearly £500/week. Then when you hit the £22.6k she then stops paying and the Government steps in an pays....

IIRC The local authority pick up the first 12 weeks. After that if you have assets over £24k you pay the lot, between £14k & £24k the local authority will pay a contribution on a sliding scale, whilst under £14k the local authority will pick up the whole tab.

Mind you that's a different matter to whether the local authority can go after funds you've had use of but have disposed of with the intent of avoiding them being used for a care costs assessment.

Edited by vonhosen on Sunday 26th October 10:40

[schmokin1]

Thanks all.

Re all the points above, there's the rub...

They will be giving some, not all money away to their kids. As it stands they are fit and healthy and not that old. It's straightforward for IHT - must be a gift without reservation and they have to survive 7 years for it to fall out of the estate.

But if there is no time limit re care costs, then any financial help they have ever given their kids could then be regarded as trying to dispose of assets. Are the govt saying then, that you aren't allowed to give any money to your kids, ever...?

Anyone had an assessment done by the authorities recently when they were in a similar situation?

Cheers all
Schmo

[MrChips]

schmokin1 said:

Thanks all.

Re all the points above, there's the rub...

They will be giving some, not all money away to their kids. As it stands they are fit and healthy and not that old. It's straightforward for IHT - must be a gift without reservation and they have to survive 7 years for it to fall out of the estate.

But if there is no time limit re care costs, then any financial help they have ever given their kids could then be regarded as trying to dispose of assets. Are the govt saying then, that you aren't allowed to give any money to your kids, ever...?

Anyone had an assessment done by the authorities recently when they were in a similar situation?

Cheers all
Schmo

In my own experience, my dad went into care whilst my mum stayed living in the family home. The home itself was out of bounds for their assessments however 50% of their joint annuity was considered, plus any savings in their names. It didn't seem to be a witch hunt for every last penny, the social worker was quite helpful and they didn't ask about previous money given to myself (around £50k 8 years ago).

My dad had assets above the £26k limit so paid in full for a bit, and then his dementia got so bad he had to be sectioned under the MHA. This meant we could actually go ahead and apply for continuing health care funding (CHC) which isn't means tested. We had a battle with the social worker to put in the application for this, but it did go through, and we didn't pay a penny after that for his care costs until he passed away around 6 months later.

Either way, it sounds from what you've described that they're more concerned about inheritance tax rather than the costs of care. It shouldn't be the case that there is a method for them to give away all their cash, so that the taxpayer pays for their care in later life, and I think if you go all out in trying to reduce their assets and income, then this will get picked up at some point.

eta: My understanding was that for IHT, they couldn't do up your outbuilding, live there, and it considered to have been transferred to you, it would still be counted as their assets unless you had received no funds from them.

[Tje]

If and when the funds drop below the 22.5 (or whatever amount is it at the time) they have to apply for funding care. Lots of people get caught out and expect the charges to stop. They won't until the application for help has been made.

You need to do it a while before any form of care is needed otherwise it will look like deliberate avoidance, and they can come after you for it.

[DSLiverpool]

What is being missed here is the council won't support a top or even upper mid level home and in my case I couldn't put my mum in a sub standard place so I can have a bit more of her money!

I'm not saying anyone here has done that but it has to be taken into account and after doing this twice I haven't seen anything suitable under £4k PCM not even if I kid myself it'll be ok

Please bear in mind it's your parents money it should,d be used to give them the best life possible

[IainT]

MrChips said:

This meant we could actually go ahead and apply for continuing health care funding (CHC) which isn't means tested. We had a battle with the social worker to put in the application for this, but it did go through, and we didn't pay a penny after that for his care costs until he passed away around 6 months later.

Sadly this seems to be the case with Social Workers. My gran had dementia that rapidly worsened to the point she needed residential care and we weren't informed about the CHC funding by her case worker, it was only by chance that mum read about it on a dementia support group site. It seemed at the time that there was a determined effort in place to prevent people applying and getting the funding. As it was gran died before it was settled and the family picked up the bill for 4 weeks of care that should have been paid for. I suspect this is not uncommon and probably part of the cynical way the system is set up. Elderly sufferers of severe dementia don't generally last all that long and families don't have the stomach to chase after the death of a parent.

[TooMany2cvs]

DSLiverpool said:

What is being missed here is the council won't support a top or even upper mid level home and in my case I couldn't put my mum in a sub standard place so I can have a bit more of her money!

There's definitely no correlation between quality of care (as opposed to quality of decor) and price. My M-i-L was in a care home for seven years (MS and dementia) - half the price of some of the local ones to us, but much better care.

[DSLiverpool]

TooMany2cvs said:

DSLiverpool said:

What is being missed here is the council won't support a top or even upper mid level home and in my case I couldn't put my mum in a sub standard place so I can have a bit more of her money!

There's definitely no correlation between quality of care (as opposed to quality of decor) and price. My M-i-L was in a care home for seven years (MS and dementia) - half the price of some of the local ones to us, but much better care.

I don't doubt that but I have not managed to find one and we looked at 7 for my mum with dementia before settling on a BUPA home with a much higher staff to resident ratio than any other home at less cost, this ratio seems to equate to the care level and is obviously cost based.
The council dragged their heels and we ended up paying for 5 years fees and are now suing the NHS to get circa £250k back (mum was certified with dementia and that she required essential care to function, this qualifies for full funding)

[R0G]

7 years and its all yours free of the govt rules on this issue - that's it

[vonhosen]

R0G said:

7 years and its all yours free of the govt rules on this issue - that's it

That's in respect of inheritance tax (if they die) which is a different proposition to care assessment (if they go into a care home).