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property and inheritance
Hi
My mother was sole benficiary in my late fathers' will.
This leaves her a small amount of savings and sole ownership of the house in which she lives; the value of all assets are less than the minimum amount for inhertitance tax. If my mother was to need to go into care, unlikely but..., how could we avoid having to sell the property to pay for her care? Tenants in common with her children? I do not want to compromise any care she might need but I don't want my parents hard earned cash taken away unnecessarily.
My mother was sole benficiary in my late fathers' will.
This leaves her a small amount of savings and sole ownership of the house in which she lives; the value of all assets are less than the minimum amount for inhertitance tax. If my mother was to need to go into care, unlikely but..., how could we avoid having to sell the property to pay for her care? Tenants in common with her children? I do not want to compromise any care she might need but I don't want my parents hard earned cash taken away unnecessarily.
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If she becomes a tenant-in-common with (say) you, she will still own a share of the house. (Also, you may face a tax liability for receiving the share, or a Capital Gains Tax liability when then property is sold)
If she disposes of any of her assets (including her share of the house from above) and she needs residential (means tested) care, she will almost certainly be seen as doing so to reduce those assets deliberately.
If she has assets over �21k (I think, without looking it up) she will be liable to pay for all her care costs after the first 12 weeks.
The onus would be on her to demonstrate that assets had not been given away so that she could not afford to pay for care. There is no time limit as to how long after any asset is given away that a Local Authority can still take them into account and different local authorities take a different view on this. So even the suspicion by the Local Authority that this could have been the reason for disposing of the asset could mean that gifting assets away fails.
There really is no way around this as far as I know.
If she disposes of any of her assets (including her share of the house from above) and she needs residential (means tested) care, she will almost certainly be seen as doing so to reduce those assets deliberately.
If she has assets over �21k (I think, without looking it up) she will be liable to pay for all her care costs after the first 12 weeks.
The onus would be on her to demonstrate that assets had not been given away so that she could not afford to pay for care. There is no time limit as to how long after any asset is given away that a Local Authority can still take them into account and different local authorities take a different view on this. So even the suspicion by the Local Authority that this could have been the reason for disposing of the asset could mean that gifting assets away fails.
There really is no way around this as far as I know.
The LA can look back at any transaction to deprive a resident of capital. If a "significant" reason is to avoid liability for a contribution to care home fees, they can deem that she has notional capital to the value of the asset given away which they will normally seek to reclaim by way of a deferred charge on the property.
However, their CRAG guidance considers that it would be unreasonable to assume a young person with no foreseeability of residential care gives away assets with a view to avoiding care home fees.
The LA can also disregard property if a dependant relative under 16 or a carer is living in it (say for instance if a person gave up their home to live with your mother and care for her and then remained there when she went into long term residential care).
Other than that, it is actually extremely hard to avoid paying for care. She needs to bear in mind that if she successfully gives capital away (a discretionary trust perhaps), that LA care is not of a high standard and often results in minimum facilities and a shared room. There have been no decided cases on this area of the law, so it is difficult to say what would and would not be successful. The only thing that might be successful is a Deed of Variation of your father's will (if within 2 years of his death), since the variation is read back into the Will as if it is done by your father, rather than by your mother. That is the case for tax law, but has not been tested elsewhere.
However, their CRAG guidance considers that it would be unreasonable to assume a young person with no foreseeability of residential care gives away assets with a view to avoiding care home fees.
The LA can also disregard property if a dependant relative under 16 or a carer is living in it (say for instance if a person gave up their home to live with your mother and care for her and then remained there when she went into long term residential care).
Other than that, it is actually extremely hard to avoid paying for care. She needs to bear in mind that if she successfully gives capital away (a discretionary trust perhaps), that LA care is not of a high standard and often results in minimum facilities and a shared room. There have been no decided cases on this area of the law, so it is difficult to say what would and would not be successful. The only thing that might be successful is a Deed of Variation of your father's will (if within 2 years of his death), since the variation is read back into the Will as if it is done by your father, rather than by your mother. That is the case for tax law, but has not been tested elsewhere.
ihave to say i agree with ethel - you are hoping by the sound of it to preserve your mothers money (presumably so you or someone else can get left the house in any will she makes) whilst expecting every one else to pay for her care, meaning you (or someone else) gets rich while tax payers get poorer.
it dosent really seem fair!
Also, having worked in nursing, i can tell you there is a difference between having the luxury to pay for the care you want, or being at the mercy of local social services who wont nec, give you your preferred home, not nec. nearby etc. Again i agree with ethel that i cant really see any benefit to your mum at all, and while YOU certainly would benefit, would you want to at the expense of your mum's happiness or comfort? it would be a strange person who said "i want my mums money: she can live any old place and not have luxuries if she wants them because i want to be richer"
it dosent really seem fair!
Also, having worked in nursing, i can tell you there is a difference between having the luxury to pay for the care you want, or being at the mercy of local social services who wont nec, give you your preferred home, not nec. nearby etc. Again i agree with ethel that i cant really see any benefit to your mum at all, and while YOU certainly would benefit, would you want to at the expense of your mum's happiness or comfort? it would be a strange person who said "i want my mums money: she can live any old place and not have luxuries if she wants them because i want to be richer"
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