Paying of mother's mortgage - care cost concerns

PG2018_2
PG2018_2 Posts: 7 Forumite
edited 10 March 2018 at 9:35AM in Benefits & tax credits
Hi

This is my first post here and I am not even sure if it is in the right place, but I would appreciate any thoughts even just who to go to for advice:- CAB, Council etc..

My mum was left in a bad financial situation when dad passed away some years ago, including a mortgage of c. 140,000 which comes to an end in June. I am fortunately in a position to help and put the funds aside a few years ago to provide for this liability. However, I am somewhat concerned about the implications should my mum, at some, point need to move into a home. I understand the council would look at my mother's assets and, if mum needed to go into a home, they could potentially sell the house. Whilst I don't necessarily have an issue with this in general, I do not think it would be reasonable for "my" money to be taken if this situation did arise.

Are my concerns legitimate? If so, what action could I take to ring fence the funds? Is evidence of the funds coming from my bank sufficient?

Very many thanks
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Comments

  • cattie
    cattie Posts: 8,841
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    Even if you tried buying the house off of your mother & she needed to go into a care or nursing home anytime during I believe the following 7yrs it can be considered deliberate deprivation.

    Some folk may be tempted to look to putting house into trust in order to avoid care home fees, but don't be too hasty.

    By putting your house into trust and naming someone (usually your children) as the Trustees, you no longer own your house, and should you have to go into care, your property assets would no longer be calculated as part of means testing - however, although that's the logic behind putting your house into trust, in practice it can be a bit more of a minefield.

    On the surface, it might seem like the perfect way to protect your children's inheritance, but local authorities are increasingly wise to these type of schemes, with teams in place to ensure residents are not using them to get out of paying rising care costs.

    For advice the best people to contact are probably Age UK as they no doubt deal with this kind of query regularly.
    The bigger the bargain, the better I feel.

    I should mention that there's only one of me, don't confuse me with others of the same name.
  • pmlindyloo
    pmlindyloo Posts: 13,049
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    I do believe that there is a way around this but you should seek legal advice.

    This article may be useful:

    https://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11983481/If-I-pay-Mums-mortgage-will-I-get-the-money-back-if-she-sells.html

    Even though the daughter is paying off the mortgage by monthly repayments then I believe the principle applies.
  • PG2018_2
    PG2018_2 Posts: 7 Forumite
    cattie wrote: »
    Even if you tried buying the house off of your mother & she needed to go into a care or nursing home anytime during I believe the following 7yrs it can be considered deliberate deprivation.

    Some folk may be tempted to look to putting house into trust in order to avoid care home fees, but don't be too hasty.

    By putting your house into trust and naming someone (usually your children) as the Trustees, you no longer own your house, and should you have to go into care, your property assets would no longer be calculated as part of means testing - however, although that's the logic behind putting your house into trust, in practice it can be a bit more of a minefield.

    On the surface, it might seem like the perfect way to protect your children's inheritance, but local authorities are increasingly wise to these type of schemes, with teams in place to ensure residents are not using them to get out of paying rising care costs.

    For advice the best people to contact are probably Age UK as they no doubt deal with this kind of query regularly.

    Thanks Cattie

    I suppose the issue is I don't want this money to be seen as my mum's assets. I suspect I might need to buy a share of the house when I pay the money across but I would rather avoid this for various reasons.
  • elsien
    elsien Posts: 32,519
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    If you're lending her the money to pay the mortgage off, would it be possible to put a charge on the house so that when it's sold you get that amount back?
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
  • PG2018_2
    PG2018_2 Posts: 7 Forumite
    pmlindyloo wrote: »
    I do believe that there is a way around this but you should seek legal advice.

    This article may be useful:



    Even though the daughter is paying off the mortgage by monthly repayments then I believe the principle applies.

    Cheers,

    I spent ages Googling various combinations of parent/mortgage/deprivation etc but didn't find this one. I shall have a read.
  • PG2018_2
    PG2018_2 Posts: 7 Forumite
    elsien wrote: »
    If you're lending her the money to pay the mortgage off, would it be possible to put a charge on the house so that when it's sold you get that amount back?

    Cheers

    Yes, this is a solution I have considered. I really need to take legal advice but don't even have a solicitor at the moment...
  • elsien
    elsien Posts: 32,519
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    PG2018 wrote: »
    Cheers

    Yes, this is a solution I have considered. I really need to take legal advice but don't even have a solicitor at the moment...

    Some solicitors do free half hour introductory sessions. Might be worth booking one as a starting point. Showing the money coming from your account probably isn't enough as you could have gifted it to her.
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
  • elsien wrote: »
    Some solicitors do free half hour introductory sessions. Might be worth booking one as a starting point. Showing the money coming from your account probably isn't enough as you could have gifted it to her.

    Thanks again.

    The whole situation will no doubt be complicated by the fact that there is already a second charge against the property for a secured loan, although this is relatively small.

    One final question if you don’t mind? Although I am looking to use this tactic legitimately, what is stopping anybody using this method to enact an unscrupulous deprivation of assets? I.e does the charge have to be tied to me loaning the money and be done at the same time?
  • Mojisola
    Mojisola Posts: 35,551
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    PG2018 wrote: »
    Whilst I don't necessarily have an issue with this in general, I do not think it would be reasonable for "my" money to be taken if this situation did arise.
    elsien wrote: »
    If you're lending her the money to pay the mortgage off, would it be possible to put a charge on the house so that when it's sold you get that amount back?

    As elsien says, don't gift your mother the money, lend it to her.
  • Mojisola wrote: »
    As elsien says, don't gift your mother the money, lend it to her.

    Cheers

    Maybe a formal loan agreement would be sufficient then and there is no need to put a charge on the property.
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