Care Home Funding - Transferring Asset? 13 January 2009 at 9:41PM in Over 50s Money Saving 19 replies 1.8K views

minnie123

My Grandad has moved into a residential home because he was no longer able to cope at home. He is self funded - we found the home ourselves and sorted it all out ourselves. It costs him £500 weekly (so £26,000 a year). He has money in his bank account amounting to approx £100k so I am happy he will be able to pay for the home for the next 4 years. He also owns 50% of a bungalow (the other 50% was inherited by my Dad when my Nan died) the bungalow is worth approx £300K. So my question is when the money runs out will my Dad have to sell the bungalow to release my Grandads half or can we overcome this by convincing my Grandad to transfer the other 50% of the bungalow to my Dad also (he is set to inherit it anyway). It just seems so unfair that some people get funded and then my Grandad who has worked so hard for everything he had is going to lose it all. Even though my Grandad is obviously not living at the bungalow I think if we had to sell it it would really be very very hard for him. I have tried looking this up on the internet but you never really get a straight answer. I am assuming that it's possibly some rule whereby the 50% of the bungalow must be transferred so many years prior to it being considered. Can anyone help me out. ?

Savvy_Sue

Hi minnie

I think you would find the information in this thread helpful. Although that is a different situation where a son is still living in the house, the links provided should be relevant!

One question, realistically, is whether grandad is likely to survive more than four years. Not a nice question to have to ask, but nevertheless worth checking out.

Biggles

Seriously consider buying an Immediate Care Needs Annuity, which will cover the difference between his income (pension etc) and his outgoings (care home fees) indefinitely. This will take quite a chunk of his £100,000 but will do away with the need to either move to a council home or sell his property if he outlives his bank balance.

This is the best place to start https://www.hsbcpensions.co.uk/nhfa/pages/index.asp

And don't even consider trying to transfer assets, it will be seen as deliberate 'deprivation of assets'.

Errata

As your grandad's assets at the moment amount to a quarter of a million pounds it may be worth seeking information and advice from these people
http://www.counselandcare.org.uk/

monkeyspanner

As Biggles says a transfer of assets to avoid care home fees would be seen as a deliberate deprivation of assets by the council and would not be effective. The council will assess your grandfather as though the asset was still his.

It may be worth considering this move for IHT purposes but a gift of this kind would only be fully exempt from IHT after 7 years. This would only be worth considering if his total assets were in excess of £316,000 which is the current IHT exemption limit.

EdInvestor

More info about immediate needs annuities including figures

http://www.sharingpensions.co.uk/annuity_immediate_needs.htm#text2

Katykat

Minnie, first of all let me say I am in a similar position regards paying care fees. Yes, it does cost £26000 py, but your grandad will get his full state pension, plus he should be entitled to A Allowance. If you invest his capital in a high interest account ( not easy these days , I know), then you may only need to use maybe £3-5000 of his capital per year. It would take a lot of years before the 100k is gone. You cant transfer assests & get away with it. As for the house itself, the local authority cant make him sell half a house. He only owns half the house. Your dad owns the other half & he is not legally responsible for the fees ( morally is different) No one would buy half a house. On the other hand, your dad is left with an empty house, he cant sell it. He could rent it out, but half the income would be regarded as your grandads, so that could contribute to his care fees. Sorry it doesn't confirm that you can transfer assests, but maybe you may feel a bit easier. Incidentally, you have to work through the negative here. Yes, it does anger you when your loved ones have to drain their hard earned savings ( been there- done that) but try not to let it eat you up, for your own peace of mind

minnie123

Yes I think my dad is going to rent the place out so half that can go towards his fees. I am going to look into a higher interest account and work out just how much interest a year he will get. He is claiming attendance allowance and he has his pension but I can only see one payment from DWP going in monthly - does anyone know if they do combine the both. If they can't make my dad sell the bungalow that is a bonus I was also wondering if my dad could buy my grandads half at a vastly reduced price due to it only being half. Really my dad should be sorting all this but he had a stroke in Aug and so I am having to take the burden.

Errata

I'm almost certain that AA and SRP show as one DWP payment. Have you checked that he's getting the high rate of AA ?

weanie

My mother's Attendance Allowance comes from a different geographical location to her pension. She receives weekly pension and monthly attendance allowance.

minnie123

He is on the lower rate I rang up to get forms to apply for the higher rate and they said just be aware if you apply it may be removed altogether so I was scared to apply then.