Caring for elderly parent - financial viewpoint
Discussion
My aunt is currently self-funding in a care home (86, long term MS, was in LA rented property). She gets her full state pension and a widow's company pension, and had about £50,000 in savings in March. She is in one of the lowest cost care homes in the area (her choice, and it seems OK), but still has to pay just under £500 a week. Rough calculation shows that her savings will drop below the allowance just after Christmas, and she will be LA funded.
She has no children, and the beneficiaries of her will are her late husband's nephew and niece.
This has been an eye-opener for me and my 4 siblings, as well as our mum. It's amazing how quickly the bills for care rack up.
Dad died in April, mum was sole beneficiary and has the house and about £30k in savings and cash. The house is worth about £350k, but has an interest only equity release mortgage (6% p.a). The amount owing is now about £120k.
Mum is 80, and not in the best of health. She can look after herself, but the time will come when she will need care. We are considering what to do when that time comes.
Mum would prefer to stay at home when she needs care, and my youngest sister is in a position to provide that care by moving in, along with her 3 children (6, 12 and 14). Sister doesn't currently work, and lives in HA property. She previously worked in the care industry for over 10 years.
Obviously there would be an impact on our inheritance if Mum moved into a care home, so we would all benefit by my sister looking after her, especially mum.
Since us other 4 siblings would benefit in the future by Mum not paying for a care home, it's only fair that we "pay" our sister for providing care, either with cash each month, or a bigger share of the inheritance when the time comes.
My questions are around this issue:
How should we proceed financially regarding "payment" to our sister if she moves in to Mum's house?
How would any payment made affect any benefit entitlement?
What would be fair to everyone regarding payment? Percentage of any "savings" from not paying a care home? Loss of benefits to my sister from moving in with Mum?
I should add that myself and my brother are financially secure (home owners, no mortgage), but my 3 sisters are all living in rented, and any inheritance could make a big difference to their futures (deposit for a house, for example).
It feels weird thinking about this now, but it's better than leaving it until Mum loses her independence.
She has no children, and the beneficiaries of her will are her late husband's nephew and niece.
This has been an eye-opener for me and my 4 siblings, as well as our mum. It's amazing how quickly the bills for care rack up.
Dad died in April, mum was sole beneficiary and has the house and about £30k in savings and cash. The house is worth about £350k, but has an interest only equity release mortgage (6% p.a). The amount owing is now about £120k.
Mum is 80, and not in the best of health. She can look after herself, but the time will come when she will need care. We are considering what to do when that time comes.
Mum would prefer to stay at home when she needs care, and my youngest sister is in a position to provide that care by moving in, along with her 3 children (6, 12 and 14). Sister doesn't currently work, and lives in HA property. She previously worked in the care industry for over 10 years.
Obviously there would be an impact on our inheritance if Mum moved into a care home, so we would all benefit by my sister looking after her, especially mum.
Since us other 4 siblings would benefit in the future by Mum not paying for a care home, it's only fair that we "pay" our sister for providing care, either with cash each month, or a bigger share of the inheritance when the time comes.
My questions are around this issue:
How should we proceed financially regarding "payment" to our sister if she moves in to Mum's house?
How would any payment made affect any benefit entitlement?
What would be fair to everyone regarding payment? Percentage of any "savings" from not paying a care home? Loss of benefits to my sister from moving in with Mum?
I should add that myself and my brother are financially secure (home owners, no mortgage), but my 3 sisters are all living in rented, and any inheritance could make a big difference to their futures (deposit for a house, for example).
It feels weird thinking about this now, but it's better than leaving it until Mum loses her independence.
Pretty sure the terms of the equity release mortgage state that the house has to be sold (or the loan repaid by other means) on the the death of the surviving spouse, so she will have to move out. At that point she has a couple of options:
Use the inheritance as a deposit to buy somewhere, probably on a shared ownership scheme. She wants to get back to work, possibly do a nursing degree while caring for mum. It's just too easy to get trapped on benefits as a divorced mum with 3 school age kids.
Her other option may be to get back into a LA or HA property, since the mortgage company would effectively be making her homeless by forcing the sale.
There is one other option, but that depends on brexit - we all sell up and move to France, buying a small group of properties. We can't do it for another year, as my middle sister's daughter has her GCSEs coming up, and she's expected to get 9 or 10 top grades. Be a shame to mess that up for her. If we do the France thing, my youngest sister has agreed to look after mum while the rest of us get stuck into building work, etc. Mum is really keen to do this, and this is our preferred option. Hopefully brexit won't mess it up, and mum will remain in good health. We are really considering our fallback plan.
Use the inheritance as a deposit to buy somewhere, probably on a shared ownership scheme. She wants to get back to work, possibly do a nursing degree while caring for mum. It's just too easy to get trapped on benefits as a divorced mum with 3 school age kids.
Her other option may be to get back into a LA or HA property, since the mortgage company would effectively be making her homeless by forcing the sale.
There is one other option, but that depends on brexit - we all sell up and move to France, buying a small group of properties. We can't do it for another year, as my middle sister's daughter has her GCSEs coming up, and she's expected to get 9 or 10 top grades. Be a shame to mess that up for her. If we do the France thing, my youngest sister has agreed to look after mum while the rest of us get stuck into building work, etc. Mum is really keen to do this, and this is our preferred option. Hopefully brexit won't mess it up, and mum will remain in good health. We are really considering our fallback plan.
LPA for mum is in place, with myself and middle sister as attorneys. LPA hasn't been lodged with mum's bank. Original documents with her solicitor.
Mum has also made a new will since dad died, basically the same as their previous joint will, dividing the estate 5 ways (5 siblings). Myself and middle sister as executors.
Whatever we do will be by agreement in advance between all of us (including mum), ideally as a codicil to the will?
Splitting 6 ways, with 2 shares for the carer, is an idea to consider.
Mum has also made a new will since dad died, basically the same as their previous joint will, dividing the estate 5 ways (5 siblings). Myself and middle sister as executors.
Whatever we do will be by agreement in advance between all of us (including mum), ideally as a codicil to the will?
Splitting 6 ways, with 2 shares for the carer, is an idea to consider.
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