Looking to the Future!! 30 December 2010 at 4:14PM in Over 50s Money Saving 25 replies 2.3K views

hobbledehoy.

Hi, Not so sure this should be here or the property site. But here goes:

Me: 61 (62 in June)
Wife: 66 (67 in November)

Income consists of:
Me:
ESA (work group - to be re-assessed in March, and probably lose the benefit).
DLA Lower Rate Mobility.
Private Pensions
No capital

Wife:
OAP (50% of single entitlement)
Capital £16,000

Our wills are that each gets the other at death then goes to the children at both deaths.

I have a £40,000 insurance policy on my wif's life.

We live in a property valued £200,000 (with an interest only mortgage of £100,000)
Looking to sell soon and use the equity + Equity Release to buy a small bungalow

Current property is in wife's name only, as have the previous properties going back to 1997. Money came by way of compensation I got but gave to wife. Previously I owned the family homes in my name only with mortgages - up to 1997.

I am a joint beneficiary of my fathers estate who is terminally ill worth £500,000. My half (£250,000) has already been signed over to my twin daughters (£125,000) each.

Need I be looking at anything that will protect us from Social Services/Tax etc in the future? Neither of us are in good health. Wife has considerable arthritis problems and Odema, whilst I have a progressive disease that will eventually lead to Pancreatic Cancer in the medium term.

Thanks any advice is welcome

Ken68

Odd phrase Hobble...protect us from the Social Services.
Lots in the pipeline, e.g moving to a smaller place, though seems you could still have a mortgage, possible inheritance though would be best direct to your daughters from their grandad.
The whole emphasis these days is to treat people in own home, and who can afford £600 a week anyway in a care home.
Don't really know what would happen if one of you goes into care.

Newly_retired

If one of you goes into care and the other is still living in the home, it cannot be touched to pay for your care.
Without going into the details, it looks to me as if the surviving spouse might well have to pay for their care out of capital. That would be only right and proper, surely, rather than tax payers shouldering your burden ?

chesky369

Not 100% certain but I suspect that if your inheritance goes to you first and subsequently to your daughters, rather than straight from their grandparents, it could be seen as deprivation of assets.

Savvy_Sue

chesky369 wrote: »

Not 100% certain but I suspect that if your inheritance goes to you first and subsequently to your daughters, rather than straight from their grandparents, it could be seen as deprivation of assets.

I think so too. also I'm not sure how you can sign over something which is not yet yours. I'd suggest some proper advice: legal, financial, whatever, where someone who knows what questions to ask you can give you best advice.

Savvy_Sue

Savvy_Sue wrote: »

also I'm not sure how you can sign over something which is not yet yours.

and I say that for several reasons: terminally ill or not, your father could change his will and leave it all to the cats' home; equally he could survive longer than expected and use a considerable portion of his assets to make himself more comfortable; more importantly you can't know for certain what an estate is worth until you come to settle it, especially if it includes a house / shares / property of significant value, and also bearing in mind that the funeral costs and any debts are settled out of the estate.

don't get me wrong, a little forward planning can go a long way, and getting a good will written is definitely worth doing if you anticipate having to pay IHT, but given the choice between using my own assets to fund my care in the way I want or relying on the state to shunt me into whatever it's prepared to pay for - well, let's just say that at my age I've come to prefer nice hotels to youth hostels!

hobbledehoy.

Hello and thanks for all of you thoughts and comments.
As regards my father, of course he could change his will, but that is highly unlikely as we are a close family and he would hate to think that what he has in the way of capital and assets could be taken by the state in any way. He sees it that he has worked and saved hard for what he has, paid tax on his earnings and done without many things to be able to pass it down to his family.
He has his will arranged now that instead of 50% of his estate passing to me, it is directed to his two grandchildren in equal amounts, as being young, with young families, they need it more than I do. I actually inherit the sum total of '0' capital/assets excepting a photo album, his & his father's war medals and the manuscript of his latest book (royalties for his previous works are also split between my daughters') Any royalties/sale of the latest will of course belong to me as and when they are received. The rest of his assets are simply split as to about 40% value of his property and 60% in cash at banks.

What I am concerned really about is the fact that our home is actually owned by my wife (not joint) on which she has a mortgage.
If I go into care, I have no assets, so all care costs will be settled by the state. They could not touch my wife's property as I have nothing to do with it. Am I right in thinking that? Likewise if I die first, there is very little that will be passed to my wife.

However if my wife goes into a care home, and I remain in the property, could SS demand I sell it to pay the costs because I am 'only the lodger'?
The best that I can see, is that they could charge her property with the costs. If she then dies before me, the property will have to be sold to settle the mortgage as I have no legal right of tenure over it. Any money owing to the SS will then ba paid over. Is that right?
Maybe the answer is that we do move, and we obtain a joint equity mortgage of about 35% of the value, with the balance being funded out of the current equity in her home as it is now. With no payments being made as to the interest or capital, it will then hopefully defeat SS being able to charge it or demand a sale. The money that we are currently paying for the mortgage can then be used to increase our monthly income.

Hope you can understand all of that.

Savvy_Sue

I don't know if I understand or not, which is why I think you need proper advice. counsel and care may be a useful source.

Oldernotwiser

I'm sorry to sound harsh but it seems really wrong to me that you have the possibility of receiving so much money (a lottery win for most people) and yet you expect the rest of us to pay for any future care needs.

I sincerely hope that what you want to do isn't possible.

hobbledehoy.

Oldernotwiser wrote: »

I'm sorry to sound harsh but it seems really wrong to me that you have the possibility of receiving so much money (a lottery win for most people) and yet you expect the rest of us to pay for any future care needs.

I sincerely hope that what you want to do isn't possible.

Hello
I'm sorry that you feel that way. It is my father's money and he can choose who he wishes to give it to when he dies.
Are you suggesting that he changes his will back again so that I inherit the £250,000 and to please you, use it to fund our care?

Everybody is entitled to legally arrange their financial affairs in such a way that they are allowed, without state intervention, to say who and who does not receive their money. If in doing so and it avoids having to hand it over to the state, what is so wrong in that?

I doubt that there are any MP's, wealthy business owners, media tycoons etc that have not already put in place such schemes. Are you saying that they are all wrong as well?

I think the state takes enough off us during our lifetime without having to be forced into handing over the balance when we become too ill to look after ourselves or die!

And yes, what has been done by my father and what we are anticipating in doing is entirely legal and possible.

zygurat789

Of course you are entitled to arrange your affairs as you wish, so long as it is legal and having due regard to the Ramsey principle.
You are entitled to whatever everyone else in your exact circumstances is entitled to but I would anticipate that this may well be less than you expect given that the benefits regime is supposed to be being tightened and net assets of £116,000.