Mum wants to give us money from house sale

vinuela13 · 27 September 2008 at 11:25AM

My mum currently has her house on the market-valued at £135,000.She is wanting to move into something smaller which she will probably rent.
She wants to equally give myself and my sister the money from the house sale.
She has concerns that if ever she needed to go into a care home that her nad my late fathers hard earned money would be used to fund this.This is something that my Dad had strong feelings about but never got round to actually doing anything about it.
Will my mum be able to do this?
We would then pay her rent wherever she chose to live? Is this feasible?

poppysarah · 27 September 2008 at 11:28AM

Is she well? She could get a free half hour at solicitors to ease her mind.

It's not above inheritance tax levels - so it'll mostly depend on the local authority and what their attitude to it is.

If she intends giving it all away and claiming benefits that's a no no.

She should use the money to make sure she has a good quality of life. I'm sure thats what your dad would have wanted.

Mum_of_3_3 · 27 September 2008 at 12:19PM

There is a limit on the amnount of cash someone can gift you each year before you have ot pay tax on it, so be careful you don;t fall into that trap.

Is the house really too big for your Mum to live in or does she just want to move so that she can give you some cash?

The reason I ask is that if your Mum is managing to run the house ok, then maybe you talk to a solicitor about transferring the house into your name. As the house wouldn't belong to your Mum anymore she wouldn't have to sell it if or when she goes into a retirement home.

I've found a linnk that is written by a will company and you may find it useful http://www.primewills.co.uk/protect_home_against_care_fees.htm

I would like to point out that I have no clue who PrimeWills are and what the company is like. I just found the link after Googling "transferring house ownership to avoid selling for nursing care". I would advise you to seek legal advice of your own.

I hope this helps & good luck with everything

M_o_3 x

tbs624 · 27 September 2008 at 1:47PM

You need to get some proper advice on planning this one so as not to fall foul of the rules on “deprivation of income/assets”, where it can be held by the LA that an older person has transferred the ownership of their home to other family member to deliberately avoid having to pay out for their own future care home fees.

You say that you and you sister will “pay her rent” but what’s to stop either of you reneging on that promise at some point? (yes, it does happen) Are you aware that if your Mum could no longer cope in her new rented home then the subsequent care home fees can cost you several hundred quid per week?

If the t/f of the house/funds from the sale of the house to you was made within 6 months of your Mum needing care home funding the LA can recover the care costs from you and your sister.

If the gift of the property was made more than six months prior to any care home fees being needed then the LA must show that the avoidance of fees was a “significant” motive, not necessarily the main one - and they do particularly pay attention to gifts of the family home or large sums of capital when assessing fee liability. However, they have to balance that with the argument that it may not be unreasonable for a home owner to make any t/f which takes place when the owner is fit/healthy & couldn’t have foreseen that care home fees might be needed in the not too distant future..

There are specific trusts than can be used for financial planning as you get older but your Mum should get qualified legal advice on her specific circumstances, perhaps with your help . There is a very good factsheet available from Age Concern

Debt_Free_Chick · 27 September 2008 at 1:57PM

diddlyidi wrote: »

She has concerns that if ever she needed to go into a care home that her nad my late fathers hard earned money would be used to fund this.

I'm going to be a little controversial here, but try to play Devil's Advocate ...

If mum needed to swap her own home for one where she had the benefit of carers, why should she not fund this? After all, she funds the cost of living in her own home, so why would she expect to live in another home free of charge?

There has been a lot of hype about "funding care fees" over recent years. The hype often does not distinguish between the need for medical care and the need for "care".

If you and mum really want strangers making her tea and helping her in and out of the bathroom, then isn't that something that should be paid for? Surely it's no different to having a cleaner/housekeeper?

I emphasise - there is a world of difference between those that need medical care and those that don't

If you and mum are content for her to have the very basic (and often, non-existent) care that the State doles out, then you'd best prepare yourselves for a shock. You might then find that it's actually worth paying for care to get a better standard.

Care of the elderly has never been a feature of the NHS nor has it been a State Entitlement. In the "good old days" families took care of their elderly relations. Today, they either need that same family network or the means to pay someone else to do it.

Regards

Oldernotwiser · 27 September 2008 at 2:24PM

Are you sure your dad would have wanted your mother to be reliant on the care that the state supplies when she's old and vulnerable? It seems a very uncaring attiude to take - doesn't she mind this?

margaretclare · 27 September 2008 at 2:43PM

Agree with Oldernotwiser and Debt_Free_Chick.

If Mum wants to give you some money out of the goodness of her heart because she has some to spare, having benefited from the rise in equity of her property, that's one thing. Anyone can give anything to anyone AFAIK.

If she wants to give it away in the hope of claiming from the taxpayer in the future, that's a no-no.

I get a little bit irritated about comments like 'her and Dad's hard-earned money'. I would guess that she and Dad paid considerably less than £135K for the house in the first place, so therefore, the gains she hopes to make are not all 'hard-earned'. I don't know when they bought it, but I've just heard a bloke on 'Any Answers' (BBC Radio 4) saying he remembers when a house could be bought for less than a grand. I paid £58K for this bungalow in 1990. At one stage it was valued at £140K, 2 years later at £190K, it's now probably slipped back to around £160K. This is not money that was 'hard-earned' by me.

At the same time, DH and I are still saving, in our mid-70s, because (a) we've got used to a certain standard of living - simple but comfortable and (b) we just do not know what our needs may be in time to come and we want choice and comfort. And regarding 'hard-earned money', at the time that we were earning our money pretty hard in earlier decades, we weren't able to save at all, whereas we now are!

vinuela13 · 27 September 2008 at 4:23PM

margaretclare wrote: »

If she wants to give it away in the hope of claiming from the taxpayer in the future, that's a no-no.

My mum has no intention of claiming benefits and as far as I am aware never has claimed any.
Having been a manager of a Nursing Home and then discussing things through with both my Mum and Dad they didn't feel it was fair to have to fund themselves if ever either of them required nursing care when they were older.
What annoyed me considerably when I managed a home was that the state funded residents could have newspapers,magazines,toiletries, incontinence aids,hairdressing,day trips at no extra cost to themselves however the privately funded residents had to pay extra ( out of their own pocket) in order to have these things.
That IMHO is not fair

vinuela13 · 27 September 2008 at 4:25PM

Oldernotwiser wrote: »

Are you sure your dad would have wanted your mother to be reliant on the care that the state supplies when she's old and vulnerable? It seems a very uncaring attiude to take - doesn't she mind this?

I am not quite sure what you mean when you say "should she be reliant on the care that the state supplies"

lil_me · 27 September 2008 at 4:45PM

It may not be fair, but there are laws around depriving yourself of income when it comes to care needs etc. It would be best to seek legal advice for this and for any tax you would be liable for.

casper_uk · 27 September 2008 at 5:42PM

Go into a casino with her convert to chips and play a few hands of poker

What Mr tax officer? i lost it gambling, you can check at the casino if you don't believe me

Mum wants to give us money from house sale

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