Help with Care home and Savings

danjones

Hi,

If someone can help me with this it would be appreciated.

My great aunt and uncle lived together in a house owned between them both, they we're brother and sister but never had any children.

My great uncle died back in November leaving savings of 50k, this is split and passing to my grandfather the surviving brother and my aunt. Unfortunatly not long after this my auntie fell ill and now we are looking she needs to be put into a care home. She does currently have savings of around 60k and a house worth around 110k.

Obviously these are we're two people that worked hard all their lives to save this money and they wanted to see the nieces and nephews enjoying the inheritance.

My aunty is now in the situation where she wants to give her savings away, the property will have to be used to pay for her care.

My questions are
The house was owned jointly, does that mean that my uncles half of the property will fall into his estate once sold?

Can she give her savings away before she goes into care and would there be any issues with doing so? The funds would be split between 6 of us.

We are in no way trying to avoid paying fees, just hoping that she can leave the nephews and nieces something.

Thanks
Dan

Torry_Quine

She can't give the savings away if they would be needed to pay for the home as it's considered deprivation of assets.

dunstonh

We are in no way trying to avoid paying fees, just hoping that she can leave the nephews and nieces something.

Sorry but you are trying to avoid paying the fees by passing the cost on to the tax payer so you can benefit from the inheritance. Luckily, the Govt has already thought of this and its called deprivation of assets.

atush

truthfully, you are trying to avoid her paying her fees.

The uncle's half of the house will depend on how the house was owned (joint or tennants in common) and if he owned the council for his care at death. It doesn't sound like it.

Your grandfather can share or give this inheritance to the neices and nephews if he chooses, but it may be too late for a deed of variance and that would make it a potentially exempt transfer. Unless he already knows he may need care as well.

The aunt will be allowed to retain some of the capital to pass on, abt 16K I think.

somethingcorporate

Giving away cash is deliberately avoiding using them to pay for the fees.

If they have the means to pay then they should.

Luckily the government has thought of this before so giving away the money will end up with your relative being treated as if they still have it under deprivation rules.

BobQ

danjones wrote: »

Hi,
My questions are
The house was owned jointly, does that mean that my uncles half of the property will fall into his estate once sold?

Can she give her savings away before she goes into care and would there be any issues with doing so? The funds would be split between 6 of us.

We are in no way trying to avoid paying fees, just hoping that she can leave the nephews and nieces something.

Thanks
Dan

Jointly owned as Joint tenants? In which case the house passes to her.
Jointly owned as Tenants in Common? In which case it passes iaw his will. If he did not mention it specifically in the will, its part of the residue.

Your aunt cannot give it away, she need to declare it as hers and she will be required to spend the money on her care. If she passes away leaving some of her estate it can come to her hiers then if there is any money left.

You may just be trying to understand the situation, but postings like this usually attract little sympathy as its assumed that her neices and nephews are just after her money.

jamesd

Looking forward it appears that she will have £115,000 available at least from her savings and at least a half share in the house. Invested to see minimal possibility of capital loss long term that could produce around 6% as income, around £6,900 a year. With a high chance of slow capital loss it could produce around 8%, around £9,200.

Adding this to her other income sources, how does this compare to her new expenses?

Is there anything that will adversely affect her life expectancy known? The usual expectation is two to three years of remaining life expectancy once someone needs a care home for medical reasons.

Once her income and expenses are known the shortfall, if any, and how to provide for it can be considered. There are specific annuities available that will spend some of the capital to buy an ongoing income for life. Those can be useful to cover the contingency here he lives longer than average. Their payout rate can also be higher than the rate from investments. The drawback is that this does spend the capital and any spent on this can't then be inherited. So drawing down on investments is likely to better meet her objective of maximising inheritance if it is sufficient to do the job.

Another potential option is family members making repayable on death loans to her to subsidise her living costs. If she doesn't live much longer than average this may maximise the inheritance. Loans not to be mean but because it makes the individuals creditors of her estate so each will then be paid back out of the estate before any remainder is divided. that reduces risk a bit, provided there is some remaining estate.

The sort of investments that can pay out 7-8%+ as income include Invesco Perpetual Monthly Income Plus, currently paying around 7%.

naspencer

Firstly, the deprivation of assets rule is that you should not deliberately arrange your finances to avoid care home fees. Secondly it has been in the press this week that virtually no-one is ever pursued for care home fees under this rule by the local authorities. They do not have the staff, the systems or the political will to chase these things up. Thirdly, the average time in a care home is 3 years. Lastly, my own position is that I think people do have a moral obligation to pay a reasonable amount for their care.
Therefore, I cannot see that it is not very reasonable for your Auntie who has considerable assets that can be expected to cover standard care home fees ( I am assuming she is not going to be in a very expensive home) for her remaining life, to make a gift to you all of say £5,000 each. Just because she has to go into a care home does not mean she can no longer have any control over her finances. However I do think that she needs to keep the majority of her money to give her choices in where she lives and what kind of room she has for example. She may also want to purchase a more comfortable bed and/or chair.
There is no need (or system) for anyone to know about her finances until she is down to £23,000 of savings. The chances are this will never happen. If it does, it will be several years in the future and she may even qualify for NHS continuing care by then.
As stated by a member of the cabinet this week, the care system is a mess and relatives are left to decide how they are going to "play" the whole thing. It is not like the tax system where there are volumes of regulations, tax advisors and tax inspectors trying to sort out every situation. Each local authority system of financial assessment is different and all fairly amatuerish.

jamesd

naspencer wrote: »

Firstly, the deprivation of assets rule is that you should not deliberately arrange your finances to avoid care home fees.

You are permitted to arrange your finances to avoid care home fees. Same way as you're permitted to arrange your affairs to avoid paying income or other tax.

What you cannot do is make those arrangements after you have become aware from information relating to you as an individual - your own doctor, say - that you will need care in the future. If you do this, the deprivation of assets test can be applied to invalidate your planning.

Making arrangements when aware of only the generic risk of say 20% of people needing care is entirely fine.

le_loup

danjones wrote: »

"Obviously these are we're two people that worked hard all their lives to save this money and they wanted to see the nieces and nephews enjoying the inheritance."

"We are in no way trying to avoid paying fees, just hoping that she can leave the nephews and nieces something."

I love this type of comment from ... you've guessed it ... the nephews and nieces!

Don't people think for more than a second before they post?

margaretclare

jamesd wrote: »

You are permitted to arrange your finances to avoid care home fees. Same way as you're permitted to arrange your affairs to avoid paying income or other tax.

What you cannot do is make those arrangements after you have become aware from information relating to you as an individual - your own doctor, say - that you will need care in the future. If you do this, the deprivation of assets test can be applied to invalidate your planning.

Making arrangements when aware of only the generic risk of say 20% of people needing care is entirely fine.

Looking at this sensibly and logically, if only 20% of people are likely to need care, why is it that this question exercises the minds of so many people, so many more than that 20% figure would seem to justify? We see this type of question on here time and time again. Certain sections of the media seem to revel in it.

OK. If 20% of people may need care that means that 80% won't. They may need help to live at home, modifications to their house, they may need to move to more convenient residences, but care is what they will not need. That's a majority by anyone's standards. One person out of every 5 who reach an advanced age may need care. 4 out of 5 will not!!! And, my point is this: those 4 out of 5 may, will probably, need their money to make life more comfortable and enjoyable for themselves. I myself am still saving in later life because I just do not know what may be around the corner and I know from experience that, though money may not give happiness or even health, it does give choice and helps to 'oil the wheels' in so many ways.