Parents gifting money when they require care

EmmaLoveland

Thank you for your replies you've helped be to answer my question!

For those of you being slightly resentful to my wording I understand why you responded in such a way, it not being fair really only referred to the fact that my mil and fil don't seem to have a choice in how they spend their money.

A house for us will have to wait, I'll keep saving and keep my fingers crossed for a lottery win :-) x

somethingcorporate

The issue is whether they spend their money with the intention of being funded from tax payers money. Seems a bit unreasonable that they give away their cash to have it topped up elsewhere. They can still give away the money, the council will just treat them as if they haven't.

I'd suggest the council would easily see through such a plan given your mother is already receiving care.

System

As with all questions regarding avoiding deprivation of capital rules, it is unfortunately 20 years too late.
The DOC rules hinge on "intention". If your parents had made arrangements to transfer wealth to you a long time ago, as part of a general plan to help you buy a house or for tax-planning, long before there was any question of either actually needing care, then DOC would not be a consideration now.

antrobus

EmmaLoveland wrote: »

Thank you for your replies you've helped be to answer my question!

For those of you being slightly resentful to my wording I understand why you responded in such a way, it not being fair really only referred to the fact that my mil and fil don't seem to have a choice in how they spend their money.

A house for us will have to wait, I'll keep saving and keep my fingers crossed for a lottery win :-) x

You have to be aware of the fact that 'deprivation of capital' is the great boogeyman here on MSE. Almost anybody who asks a question about someone over the age of about 50 (?) gifting money to anybody gets the deprivation of capital warning.

It might be the case that your mother has a greater chance of requring residential care sometime in the future because she is a wheelchair bound MS sufferer who currently requires home care. Or it might be that she has a much smaller chance of requring residential care sometime in the future, because she is almost certain to die before her husband. I don't know.

People shouldn't place their lives in suspended animation just because the future is uncertain. If your parents want to release some capital by downsizing in order to provide you with a deposit for a home, then you should just do it. One or more of your parents might or might not require residential care in the future. That could be 10, 20 years in the future. Who knows what the rules will be like then?

Linton

antrobus wrote: »

You have to be aware of the fact that 'deprivation of capital' is the great boogeyman here on MSE. Almost anybody who asks a question about someone over the age of about 50 (?) gifting money to anybody gets the deprivation of capital warning.

It might be the case that your mother has a greater chance of requring residential care sometime in the future because she is a wheelchair bound MS sufferer who currently requires home care. Or it might be that she has a much smaller chance of requring residential care sometime in the future, because she is almost certain to die before her husband. I don't know.

People shouldn't place their lives in suspended animation just because the future is uncertain. If your parents want to release some capital by downsizing in order to provide you with a deposit for a home, then you should just do it. One or more of your parents might or might not require residential care in the future. That could be 10, 20 years in the future. Who knows what the rules will be like then?

Disagree. When one is retired one must make careful and well considered plans for management of ones finances. If you are in work future wages can help recovery from expensive mistakes, when you are retired such mistakes are with you for the rest of your life and can blight your very old age.

So, yes, nothing wrong with the parents paying a gift to a son/daughter. But they should only do it after careful consideration of the consequences. In this case the key issue is whether the parents would retain sufficient wealth to more than meet their financial requirements for the rest of their lives, including the purchase of a care annuity should that be required. Relying on the state to provide something adequate should not be part of that planning unless there is no other option. Firstly, it may not work and secondly what is provided could be of a standard they would not be happy with, or the likely beneficiaries of any gift would not wish on anyone they loved.

Mrs_Arcanum

EmmaLoveland wrote: »

Thank you for your replies you've helped be to answer my question!

For those of you being slightly resentful to my wording I understand why you responded in such a way, it not being fair really only referred to the fact that my mil and fil don't seem to have a choice in how they spend their money.

A house for us will have to wait, I'll keep saving and keep my fingers crossed for a lottery win :-) x

If your PIL are careful about what property they downsize to they may never need to worry about care (one of those retirement villages or a practically kitted out bungalow for example).

There does seem to be an automatic assumption that everyone will go into some form of care home in their old age, and must therefore not spend money helping out family. Many people still die in their own homes you know.

Linton

Mrs_Arcanum wrote: »

If your PIL are careful about what property they downsize to they may never need to worry about care (one of those retirement villages or a practically kitted out bungalow for example).

There does seem to be an automatic assumption that everyone will go into some form of care home in their old age, and must therefore not spend money helping out family. Many people still die in their own homes you know.

All very true. However if one has sufficient wealth it makes sense to plan for the worst eventuality. If that means the kids waiting for their pot of gold, so be it.

le_loup

[QUOTE=Mrs_Arcanum;55120877spend_money_helping_out_family._[/QUOTE]
Your post count suggests that you've been around these parts for long enough to see that MOST of these types of enquiry come, not from people wishing to help their families but from people who would benefit from such an arrangement.

richbeth

somethingcorporate wrote: »

The issue is whether they spend their money with the intention of being funded from tax payers money. Seems a bit unreasonable that they give away their cash to have it topped up elsewhere. They can still give away the money, the council will just treat them as if they haven't.

Hi,
isn't the above the key point ? Your inlaws can do exactly what they want with their money but, depending upon the exact cirumstances, it may impact their ability to claim benefits either now or at some point in the future.

It's a risk they need to be aware of but as per an earlier post should take specialist advice as everyone's circumstances are different.

Good luck,
Richard

Mojisola

antrobus wrote: »

It might be the case that your mother has a greater chance of requring residential care sometime in the future because she is a wheelchair bound MS sufferer who currently requires home care. Or it might be that she has a much smaller chance of requring residential care sometime in the future, because she is almost certain to die before her husband.

MIL is receiving care three times a day at the moment. Emma hasn't said whether her PIL are paying for that themselves or are getting help towards paying for it.

If they are getting help towards the costs now, downsize and give away capital, they will be reassessed as still having that capital.

If all the costs are being paid privately, won't they need to keep the capital in order to keep funding what, with MS, will be an increasing need for care.