bond and giving it away!

aimex

Hi there,

not sure if this is in the right place so please move if it isnt.

a friend of mines parents have a bond which they can cash in at any time, or, it will pay out on their death. its worth around £25k at the moment. the friends parents are considering transferring it into the daughters name as she would get it on their death in any event. can they do that?! are there any implications? the main reason is so that they reduce their assets so that this isnt swallowed up if it is necessary for either of them to go into a home.

not very clued up on all this

thanks x

Farway

They can do it, but it will be most likely be deemed as "deliberate deprivation of assets" and the council, or whoever, will assume she still has this money

Do a search on "deliberate deprivation of assets" for more about this

basically not a good idea, both legally & morally

PS one option could be cash the bond and drip feed a few K now and again over a few [maybe 10 plus?] years

bryanb

The implications are that if the CC found out about it they would regard it as "Deprivation of assets" and would assess as though parents still had the money.

medders2604

If it is a life assurance bond and has been running for a few years and they didn't take it out specifically to avoid care home fees it wouldn't be taken into account for nursing home fees anyway.
The only thing that would be taken into account for nursing hime fees is if they take a regular withdrawal from the bond.
Have a look at the CRAG report here http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_4107292 and this will confirm this for you and tell you what is and isnt taken into account for nursing home fees.
Are your friends likely to have an IHT issue? If no they can leave bond as it is, if they are going to have an IHT liability they could wrap the bond into a gift trust for their daughter to mitigate this.