Care Home Funding (what if mum sold me her house!?)

iang26brixton

Hi,
My mother (who is in her 70s) is the sole owner & resident of her house, and if possible (in the event of her having to fund care fees) I'd like her to avoid having to use her home to fund care fees.
I've read (via a simple google search) that there maybe two avenues open to her. One is that, should she need to move out of her house & into a residential home, she could rent out her house. This income would then be used to pay (if only in part) for her care.
The other option is to transfer part ownership of her property to her children. Thus altering her as 'sole tenant' to 'Tenants In Common' with her children. The 'TIC' route would determine her children to be considered in much the same way that a spouse would be. In that if she were still to be married with her spouse living in the same house, if she were to need residential care, the house wouldn't be considered an asset in any means test. This would be due to the husband, or in the 'Tenants in common' scenario - the children, being considered as having a right to the property.
One company i found on the web suggest the transfer from sole owner to Tenants in common to be a relatively easy, however being the sceptic that I am I'm trying to find out more. There's lots of information on t'internet however this mainly discusses joint owners to 'TIC's (ie, making a husband & wife 'TIC's rather than 'joint owners'). I'd really like some more information & comment on the process to follow for transferring a portion of the property ownership to my mum's children, so any advice will be appreciated.

Errata

You need to read up on Deprivation of Assets, the AGEUK site would be a good place to start.

vroombroom

I'm amazed at how greedy people can be when it comes down to inheritance and money why should the state have to pay for your parents upkeep when they have money tired up in their property?

Gavin83

To all those that suggest that the money shouldn't be used for care, what do you suggest they should actually do with the money? After all, it's not like they'll want a new car or holiday.

Gavin83

iang26brixton wrote: »

The other option is to transfer part ownership of her property to her children. Thus altering her as 'sole tenant' to 'Tenants In Common' with her children. The 'TIC' route would determine her children to be considered in much the same way that a spouse would be. In that if she were still to be married with her spouse living in the same house, if she were to need residential care, the house wouldn't be considered an asset in any means test. This would be due to the husband, or in the 'Tenants in common' scenario - the children, being considered as having a right to the property.

There is a massive negative to this. If the child was to divorce, go bankrupt or die then the house would be considered an asset and therefore the parents could be forced to sell. I've known this situation to happen. I've also known parents who have transferred ownership only to have their children kick them out.

It also has to be your sole property, if it's classed as an interest in a second home the value will be considered and you still have to do it early enough so they don't consider it depriving yourself of assets.

iang26brixton

Thanks for your info Gavin83.
Due to exactly the reasons you state, she would of course need to have created a form of Declaration that would tie in with her will. In the event of one of the children dying, their portion would go (in equal share of ownership) to the other surviving children.
Re the divorce & bankrupty angles, yes I would need to find out more regarding the risks.
The intention wouldn't be to transfer whole ownership to the children. Just enough to ensure that any means test would see the asset (the house) as owned as 'Tenants In Common', and therefore wouldn't consider it an asset. However to 'doublely' enforce this intention, a legal Declaration would be created so all the children agree that Mother can live in the property whilst her need to remains.
Lastly, the property is my mother's sole property.:o

Pollycat

Iang
It might be of use to you to read Factsheet 3 from this website:

http://www.counselandcare.org.uk/finding-and-paying-for-a-care-home

titled:
Assets: disadvantages of giving your capital away

Under 'Deprivation of Capital' it says:

Deprivation of capital
[FONT=StoneSans,Stone Sans][FONT=StoneSans,Stone Sans]The guidance around deprivation of capital states that ‘intention’ is a key factor in the transfer of property or capital. Where a council believes that someone has transferred capital or ownership of a property, or made extravagant purchases, in order to avoid paying care home fees, the council may decide that this amounts to ‘deprivation of capital’. If the council decide this is the case, it will see you as still having the capital or property (notional capital) that you deprived yourself of and will include its full value in your financial assessment. [/FONT][/FONT]

It goes on to say

There is no time limit on how far back social services can look at your financial affairs.

So before you get entangled in potential costly legal fees, you might like to think if the action you're considering would actually work for you (in the eyes of the local council who will be deciding what forms capital in the event your Mum goes into a care home).

must_try_harder_2

I can see why it is annoying that people who have worked hard and bought a house and saved up can feel hard done by when that cash is used to pay care home fees, whilst others get the care for free. However I also agree that they have no use for the money and house if they need full time long-term care.

The most important thing in any situation is the level of care that the individual gets. With a funded place you are placed anywhere and it might be horrible. If you are funding the place yourself you (and your family) have the choice of where you go. I would rather have not a penny in inheritance from my parents and ensure they were staying in the absolute best place possible for them. I simply cannot understand why anyone would feel differently to this.

Mojisola

Pollycat wrote: »

So before you get entangled in potential costly legal fees, you might like to think if the action you're considering would actually work for you (in the eyes of the local council who will be deciding what forms capital in the event your Mum goes into a care home).
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I think that this is very important. Unless you can show another good reason why the changes in ownership were made, the council will be able to claim that it was done for deprivation reasons.

onlyroz

must_try_harder wrote: »

I would rather have not a penny in inheritance from my parents and ensure they were staying in the absolute best place possible for them. I simply cannot understand why anyone would feel differently to this.

Couldn't agree more. I think some people are tremendously selfish when it comes to their supposed "right" to an inheritance.