Could any legal types help me out - Care Homes and IHT Law?
Discussion
I need a favour - some general "advice". Later on I will need a lawyer who I will pay but I would REALLY appreciate any PH lawyers view on this - its not a "Business" issue but I'm hoping someone in here might be able to help.
My father has recently gone into a Rest Home. Shortly this will be a Nursing Home. He doesn't have long, frankly. He has a few assets in his own name. No doubt these will be called upon (governmentally) to support his needs.
He owns the house jointly with my Mum. Mum is very frail but may well be able to live on in her home for a good while (a few years). Luckily most of their cash assets and so on are in her name.
There are four kids (including me).
We want to:
1) Preserve as much of my Mother's assets as possible in the immediate term.
2) Ensure that my Mother's assets can be used by her in whatever manner SHE deems she wishes to right up to the point she dies.
3) Inheritance Tax upon *her* death (hopefully in many years!) is minimised.
Sadly her home despite being in a what I thought was a cheaper area of the country may be worth well over the limits.
I would be deeply grateful if someone could advise
1) What the government can and cannot sequester of her funds to pay for Dad's care
2) What the government can and cannot sequester to pay for HER eventual care in some years' time.
3) What strategies could be used to minimise IHT.
I realise they should have started this years ago. A lot of personal feelings got in the way and are running very high now. I just need some pointers to the facts so I can advise my Mum, comfort my Dad and reassure my siblings.
Thanks.
My father has recently gone into a Rest Home. Shortly this will be a Nursing Home. He doesn't have long, frankly. He has a few assets in his own name. No doubt these will be called upon (governmentally) to support his needs.
He owns the house jointly with my Mum. Mum is very frail but may well be able to live on in her home for a good while (a few years). Luckily most of their cash assets and so on are in her name.
There are four kids (including me).
We want to:
1) Preserve as much of my Mother's assets as possible in the immediate term.
2) Ensure that my Mother's assets can be used by her in whatever manner SHE deems she wishes to right up to the point she dies.
3) Inheritance Tax upon *her* death (hopefully in many years!) is minimised.
Sadly her home despite being in a what I thought was a cheaper area of the country may be worth well over the limits.
I would be deeply grateful if someone could advise
1) What the government can and cannot sequester of her funds to pay for Dad's care
2) What the government can and cannot sequester to pay for HER eventual care in some years' time.
3) What strategies could be used to minimise IHT.
I realise they should have started this years ago. A lot of personal feelings got in the way and are running very high now. I just need some pointers to the facts so I can advise my Mum, comfort my Dad and reassure my siblings.
Thanks.
rsvmilly said:
I think one of the favourite ways to do this is for your mum to sell the house to the kids for a notional amount and then live in it rent-free (or £1 per month..)
Need to find out how to make something like this both legal and watertight. I do not want the Inland Revenue getting so upset they make things difficult!
Surely selling the house to the kids for £1 would result in taxation problems?
If your mother doesn't have much cash to fund your father's nursing home (there are thresholds, I forget the amounts - your local authority should be able to tell you), then there is nothing they can do to get any money out of her - I'm sure they can't force her to sell her house to raise the funds for example.
However, you may need to balance this thought with the eventual inheritance tax issues. You may consider for example, selling her house and moving her into a smaller home and doing what you will with the spare cash. The local authority will no doubt have their eye on this cash for the funding of your father's nursing home. Still, if your mother survives for another seven years, you are OK on the inheritance tax front, if she doesn't, you will no doubt have spent some of the cash released from the house sale on essentials.
In any case, you may be able to take out insurance against the (reducing over seven years) inheritance tax liability. (Meanstesting's a bugger when you've saved hard all your life isn't it?)
However, you may need to balance this thought with the eventual inheritance tax issues. You may consider for example, selling her house and moving her into a smaller home and doing what you will with the spare cash. The local authority will no doubt have their eye on this cash for the funding of your father's nursing home. Still, if your mother survives for another seven years, you are OK on the inheritance tax front, if she doesn't, you will no doubt have spent some of the cash released from the house sale on essentials.
In any case, you may be able to take out insurance against the (reducing over seven years) inheritance tax liability. (Meanstesting's a bugger when you've saved hard all your life isn't it?) rsvmilly said:
I think one of the favourite ways to do this is for your mum to sell the house to the kids for a notional amount and then live in it rent-free (or £1 per month..)
Gordy and the IR have blocked this approach. We looked at it a couple of years ago and a high powered legal type offered to set up a scheme for us for £30,000
About a month later the rules were changed, so that would have been money down the drain and no mistake!The Londoner said:
rsvmilly said:
I think one of the favourite ways to do this is for your mum to sell the house to the kids for a notional amount and then live in it rent-free (or £1 per month..)
Gordy and the IR have blocked this approach. We looked at it a couple of years ago and a high powered legal type offered to set up a scheme for us for £30,000
About a month later the rules were changed, so that would have been money down the drain and no mistake!A lot of effort is going into devising schemes for just this scenario but I am not aware of any that work at present. If you give your property away they claw it back as they allege its a disposal to thwart the obligation to pay.
One point to look at very carefully however is the extent to which "care" becomes "nursing". The goalposts are moving on this and, thankfully, in favour of the ordinary Joe.
The push is to get "nursing" paid for by the NHS and with each case that goes through it seems that more and more is being classified as nursing and hence requires local authority or NHS money - but you have to fight for it. I saw a headline only last week about some huge number (maybe 500,000) pensioners being denied money illegally and I think Panorama recently did an article on it.
If they tell you that your father's care has be paid for then question it, challenge it anyway you can and check out as much as you can on where the NHS obligations end and pure "care home" facilities start.
It's an abomination that someone who works hard, saves up to provide for their retirement and to set a little aside for their family gets stiffed while some work shy toe rag who has p*****d it all away on fags, beer and bingo gets the same care and nursing paid for at the expense of those who get taxed on the home they then have to sell to pay their own costs
ad nauseam
One point to look at very carefully however is the extent to which "care" becomes "nursing". The goalposts are moving on this and, thankfully, in favour of the ordinary Joe.
The push is to get "nursing" paid for by the NHS and with each case that goes through it seems that more and more is being classified as nursing and hence requires local authority or NHS money - but you have to fight for it. I saw a headline only last week about some huge number (maybe 500,000) pensioners being denied money illegally and I think Panorama recently did an article on it.
If they tell you that your father's care has be paid for then question it, challenge it anyway you can and check out as much as you can on where the NHS obligations end and pure "care home" facilities start.
It's an abomination that someone who works hard, saves up to provide for their retirement and to set a little aside for their family gets stiffed while some work shy toe rag who has p*****d it all away on fags, beer and bingo gets the same care and nursing paid for at the expense of those who get taxed on the home they then have to sell to pay their own costs
ad nauseamThanks bill.
Sadly Dad has now left the "rest home" and is in hospital - so there is no doubt that its the NHS picking up the bill...I'd rather he was better, of course.
Hopefully with treatment he will recover enough for us to move him into the local "rest home" again. Should this happen he will be close enough to Mum for her to see him every day. Its too much to hope for that he would be well enough to move back home, I'm afraid. But this *will* need to be paid for.
I'm just trying to protect Mum's ability to live at home. She can look after herself...but not Dad anymore.
Sadly Dad has now left the "rest home" and is in hospital - so there is no doubt that its the NHS picking up the bill...I'd rather he was better, of course.
Hopefully with treatment he will recover enough for us to move him into the local "rest home" again. Should this happen he will be close enough to Mum for her to see him every day. Its too much to hope for that he would be well enough to move back home, I'm afraid. But this *will* need to be paid for.
I'm just trying to protect Mum's ability to live at home. She can look after herself...but not Dad anymore.
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