Need advise about parents house and selling for care costs

Londonsu

My parents are in their 80s and although hale and hearty we have to face the fact that they may need residentail care at some point.

The house they live in has been in our family for over 120 years and I will inherit it on their death.

I have my own home paid for with no mortgage but it wont be worth as much as my parents home on the open market.

The question I have is that my parents have savings which they can use for care costs but if there is a shortfall, can I sell my own home to pay the costs and live in the family home.

We are close to each other so would it be best if we swapped homes, or would that be construed as my parents disposing of assets by the council.

We also want to ensure that one of the younger members of the family inherit the house after me.

I am hoping there is a way round this as this house is part of my family history and we will fight to keep it.

Torry_Quine

As long as any fees are paid it doesn't matter where the money comes from. The only potential problem I could invisage is if you used up all the money from the sale of your house and didn't have anything else to pay with. However this is all hypothetical as they may never need to go into a care home and if only one of them did the house would be disregarded.

aries69

I've only had experience of this where one remaining parent has gone into residential care and the cost of the care comes from their savings (but I think so much is protected), once this has run out the care costs come from the equity/proceeds of the sale of the property.

I've dealt with a couple of cases where the property is on the market for sale and benefits are covering the care costs but once the property is sold then the amount will need to be repaid.

Swapping houses would seem the ideal solution - what is the difference in values? I think its worth speaking to a solicitor, I know my parents re-wrote their Wills last year to protect themselves in these circumstances.

Londonsu

Thats the problem my parents house if sold on the open market will be worth about 3/4 million mine would be worth about 125k

But the house actually is priceless as its a family home and no-one outside my family has actually lived there.

a solicitor may be the best route as I can see a greedy council looking at my parents home with pound signs in their eyes.

BTW we are not trying to get out of paying fees but just dont want the house sold

sunshinetours

Definitely speak to a solicitor. Basics such as whose name the house is in at present and wills should at least be reviewed. Get a solicitor who specialises in dealing with elderly clients as well

The issue of having to sell or have a charge on the house is only relevant I believe if either both parents go into residential care or one dies and the remaining one ends up in residential care.

Easiest solution may be that if required could the house be rented out to cover care fees? That would keep the ownership of the house in the family

May be worth seeing an accountant and a solicitor if they are also concerned about inheritance tax as its ounds as though their estate would be in the realms of IHT

poppysarah

Londonsu wrote: »

a solicitor may be the best route as I can see a greedy council looking at my parents home with pound signs in their eyes.

Doesn't quite work like that.

What are fees these days?

£2k a month?
Average life expectancy in a home? Don't know ... but 6 years is from diagnosis to death on some dementias.

£2k x 12 x 6 x 2 =£288k

so it's a lot of money... but you don't know they'll need care so it's all hypothetical.

Perhaps some legal advice about it all - and if you wanted to sell your house and buy a stake in their house with the proceeds, then they'd have cash to spend and a loving child to look after them in their own home?

hazyjo

Also, worth considering if you can actually afford to run the house long term once it's yours...

You say you could pay for (or towards) care costs from the sale of your home. Do you have a mortgage on it? If yes, for how much?

Jx

The_Drama_Llama

I would definitely advise you see a solicitor about estate planning, otherwise you might have to sell the house anyway when your parents die, to pay inheritance tax, which would be a terrible shame.

CloudCuckooLand

As DramaLlama says, while care fees might be a problem, Inheritance Tax will be a problem.

Tax planning requires urgent attention.

puddy

poppysarah wrote: »

Doesn't quite work like that.

What are fees these days?

£2k a month?
Average life expectancy in a home? Don't know ... but 6 years is from diagnosis to death on some dementias.

£2k x 12 x 6 x 2 =£288k

so it's a lot of money... but you don't know they'll need care so it's all hypothetical.

Perhaps some legal advice about it all - and if you wanted to sell your house and buy a stake in their house with the proceeds, then they'd have cash to spend and a loving child to look after them in their own home?

also, if the house is in joint names, and only one of the couple need care, isnt the case that the house is not expected to be sold at that point, but a charge is put on the house by the council for the half that the patient owns?

when the second spouse dies, the council want their money, but you may not necessarily need to sell the house to get this money, you could sell your own house to pay the fees (as long as it covers that)

obviously if any fees came to more than 125k then yes you would either need to remortgage their (your new inherited home) house to pay the fees.

what if the house is only in one of the spouses names and its the other spouse that needs care? are there any payments to make if the spouse in care has none of their 'own' money?

BitterAndTwisted

The easiest way to avoid care-home fees is to have aged rellies looked after at home by family, just like everyone did in the past. It's social care which needs to be paid for from assets which seems only fair: necessary medical care is paid for by the NHS.

I agree about the need for urgent tax-planning if the family aren't to be hit by Inheritance Tax