Dad moved into sheltered accomodation, should he sell his house?

Eenymeeny

I wonder if anyone can advise my family on what might be best for Dad (aged 82) who has moved into sheltered accommodation 6 months ago? He seems to have settled ok and is quite happy to sell his house and wants the proceeds to be divided amongst sons and daughters. Apparently if he has savings any benefits that he receives will stop. (Which is fair IMO) If at a later date, he has to go into care would any gifts have to be repaid to pay his care fees or is there a time span? (Someone mentioned gifts of £3000 per year to family?) Is he allowed to do this or is it considered fraud? Some members of the family think that it will be better just to leave the house empty with a 'wait and see' attitude. I know that we don't know what's coming but wondered if anyone had had similar experiences or could recommend any websites etc?
Thanks a lot for any advice, it's doing my head in!

monkeyspanner

The gift allowances you mention relate to Inheritance tax gift allowances. Essentially you can give any amount gifts and if you survive 7 years after the gift they will be exempted from IHT the revenue call these potentially exempt transfers (PETS). The first £3000 each year is exempted however long you survive plus there are additional exempted gifts e.g. gifts on marriage . These limits are only relevant if the estate is likely to be near or over the IHT nil rate band which is around £300,000.

As your Dad has moved into sheltered accommodation is he in bad health? If he is and he needs residential care then the council may view any previous gifts as a "deliberate deprivation of assets" to avoid paying for his care home fees. If they do then they may add the gifts onto his remaining assets in any financial assessment. If the gift has been made within 6 months of needing residential care the council can recover the gift from the recipient but this is unlikely. If he is in pretty good health then it could be argued that there was no visibility of needing residential care and therefore gifts were not inappropriate.

We were in a similar situation with my MIL and decided to sell. But you could look at renting so you Dad has additional income and he can make gifts from the income. Leaving the house empty will give you additional problems particularly over the winter with possible problems with insurance (insurers don't like long term empty properties) and deterioration of the house.

Personally I think having some cash to pay for a better standard of care home than the council would pay for is a good idea, so retaining some capital is advisable. If you want to look at funding care home options you could look at this site https://www.counselandcare.org.uk

Eenymeeny

Thanks so much, just the information I needed.:T

margaretclare

I know of several people around here who sold their houses on moving into sheltered accommodation. They wanted the freedom of house maintenance, gardening, repairs, the advantage of having all those things taken care of for them.

If your Dad rents out his former home he'll have all the hassle of being a landlord. He'll be responsible for collecting rent, getting new tenants, repairs and maintenance, the responsibilities. The people I know moved because they wanted to be free of the responsibilities and are glad to be shot of them. Does he really want all that? And if you say you'll do it for him, do you really want all that?

pollypenny

Do you live near him?

When my dad went into a home, we kept the family home so that my sister and I had somewhere to stay each weekend when we visited. He was self financing, on his pension although capital was decreasing steadily.

You need to consider his health and other aspects.

HoofeHearted

If you leave the house unoccupied, as well as the already mentioned issues, Council Tax will have to be paid after 6 months.

My FIL changed ownership to his 3 children, four years before he had to go into a Care Home. The Social Services review did not consider this as an asset because they had no proof of him showing signs of dementia when the house changed ownership. Also, maybe 4 years is too long to claw back assets!?!

My advice, get him to change ownership to his children ASAP and hope he has many happy years in sheltered accommodation.:j

Then you and yours can decide what to do with the house; rent, sell or move in. Just don't leave it empty for too long.

jimbms

I would say he should sell the house to you all for a nominal amount on an interest free private mortgage with a solicitor drawing a section in the agreement that in even of his death the mortgage is cancelled and the property reverts fully to you. in addition he can also give back to you a percentage of the monies you give him as mortgage payment as a tax free gift. If this is done correctly it serves good for all of you in the following ways. It will drastically cut down on any inheritance tax as there is a good chance you will own the majority of the property by then. Secondly should your fathers health get so bad he needs constant care the thieving social services cannot steal the house to pay for his care and instead have to use the money he has payed them for this all his working life. And last of all it will ensure he has a bit of income out of the house. At the end of the day he has worked hard to get that house and it is your duty to ensure the taxman, social services or the government cannot steal a penny of it.

monkeyspanner

HoofeHearted wrote: »

If you leave the house unoccupied, as well as the already mentioned issues, Council Tax will have to be paid after 6 months.

My FIL changed ownership to his 3 children, four years before he had to go into a Care Home. The Social Services review did not consider this as an asset because they had no proof of him showing signs of dementia when the house changed ownership. Also, maybe 4 years is too long to claw back assets!?!

My advice, get him to change ownership to his children ASAP and hope he has many happy years in sheltered accommodation.:j

Then you and yours can decide what to do with the house; rent, sell or move in. Just don't leave it empty for too long.

There is a 6 month time limit for claw back of transfered assets from recipient but there is no time limit for the council in their consideration of deliberate deprivation of assets. In the event the council considered there was a deliberate deprivation they would probably assess as if the assets had not been transferred and not pay towards care home fees. As you say the SS would have to have a reason to suspect there had been a reasonable expectation that a care home placement would be needed at the time of the gift.

Newly_retired

When my mum decided to go into a care home after dad died, both she and the family fully accepted that the house would be sold. It didn't happen till she was settled and good and ready to let it go, but at least there were no worries about paying for her care. She deserved it, and had a wonderful 7 months, with a new lease of life, with no worries about the house, or where the next meal was coming from. To us it was perfectly normal that the house money was used for her care and I did not think of it as being stolen by social services or the government. Far better than adding a greater burden to the taxpayer to give her a good few months of being cared for.
I was lucky in that she did not live long after that and so I inherited what was left along with my sister, but I wasn't expecting anything. It was my parents' house, their money not mine, and I was glad it was there to be used to give mum the care she needed.
That's how I saw it anyway,

margaretclare

Newly_retired wrote: »

When my mum decided to go into a care home after dad died, both she and the family fully accepted that the house would be sold. It didn't happen till she was settled and good and ready to let it go, but at least there were no worries about paying for her care. She deserved it, and had a wonderful 7 months, with a new lease of life, with no worries about the house, or where the next meal was coming from. To us it was perfectly normal that the house money was used for her care and I did not think of it as being stolen by social services or the government. Far better than adding a greater burden to the taxpayer to give her a good few months of being cared for.
I was lucky in that she did not live long after that and so I inherited what was left along with my sister, but I wasn't expecting anything. It was my parents' house, their money not mine, and I was glad it was there to be used to give mum the care she needed.
That's how I saw it anyway,

I completely agree with all of this, and that's how I would see it too.

As far as DH and I are concerned, if our house property forms part of our estate, and if the survivor no longer needs it to live in after the first of us departs this mortal coil, I would expect the 'bricks and mortar' to be used in the way that Newlyretired describes above.

I don't go along with all this talk of 'thieving social services' and 'stolen by the government'. People who steal - fraudsters, professional burglars, pickpockets and the like - are in it for themselves. Social services do not actually gain from any of these transactions. Social services staff have to implement agreed policy - they don't end up with diamond necklaces as a reward.

Mojisola

HoofeHearted wrote: »

My FIL changed ownership to his 3 children, four years before he had to go into a Care Home. The Social Services review did not consider this as an asset because they had no proof of him showing signs of dementia when the house changed ownership.

One problem with doing this is that it means parents are put into a home by Social Services with little choice about where they go. Maybe in your area the SS funded places are in homes you would be happy to live in. Having seen some of the ones round us, I wouldn't want my parents to be in them. Selling their house, if they need to go into a home, will allow them to choose where to go and could make the difference between their last years being happy ones rather than very miserable ones.