Financing care for elderly person with assets

wowzetov

If someone has a parent who has been diagnosed with Alzheimers and needing to be in a residential care facility, and if that parent owns their own home can the next of kin sell that home in order to finance the required care, and what is the procedure for doing so? Is court approval required in advance or how does it work?Does it matter if there is still a mortgage on the home, and does any of this affect benefits or insurance pay-out entitlements of the parent?

Cute_'n'_Quirky

The simple answer is no, you cannot sell the home.

Even when it is husband and wife involved.

You CAN do it by getting a special order through the High Court in London and it costs about £20K.

I know someone where this has just happened to his parents. He went to six different solicitors in four different towns, just to make sure -

His Mother is fine and well, Father has Alzheimer's. They own their own home outright with only son. Father is in a nursing home, Mother needs to move into a bungalow. Mother and son are not allowed to do anything at all, they simply have to sit and wait it out until Father passes away - or pay the £20K.

I thought this sounded daft but they took all the legal advice they possibly could.

minimadtrix

My ex MIL had Alzheimers and was diagnosed around 2002/3. Before I was accused of trying to raid her family of her finances, I looked in depth into what we could do to finance her stay in residential care. She too had her own home, however, she owned it outright. This is what I found out and hope it helps:-

Firstly, you can't get anywhere or sell anything without first getting a power of attorney. I'm sure someone else will be able to advise you on this because I think things have changed over the last few years.

There are other ways of financing her care without the need to sell the home. Alzheimers care homes are more expensive that normal residential homes because of the amount of care the patient needs and soon eats up any profit you think you might get from a sale.

Because she had Alzheimers, she was entitled to attendance allowance, which you can still claim if they are in residential care because obviously someone is caring for them (unless of course this has changed in recent years - as I previously said, she is now my ex MIL!)

She obviously still received her state pension and had a couple of private pensions which obviously went some way towards paying for the care.

The final amount could come from renting the property. If there is an outstanding mortgage, you would have to change it to a Buy To Let, but then whatever your shortfall is, that's what you would need to charge rent (plus insurances).

I'm not sure what insurances you are talking about, so can't comment on that.

It really might be worth you contacting Social Services and CAB to see what else they can suggest.

Hope this helps somewhat

wowzetov

Thanks for those insights. Really they are helpful. But I'm very surprised if this is the situation because if the parent is a patient and eventually runs into debt to the care facility then won't they be vulnerable to adverse proceedings to collect the debt which may include a claim against the asset/home? Wouldn't selling it for them be the logical way to avoid that? Also, if the parent has Alzheimers and wishes to sell the home is that legal even if the parent's state of mind is not consistently reliable? Can the parent give power of attorney even when in a deteriorating state of mind?Finally, if family cannot sell the home how can they be authorised to rent it out?

Cute_'n'_Quirky

The Social Services keep a record of monies owed and the debt can be paid on death. A person can stay in a nursing home and pay from savings and still keep their home, until funds run out, then the State would pay but keep a tally and the amount paid on death, plus interest accrued.

If the house is in joint names then it needs joint consent for a sale of the property which could not be given where one party has alzheimers.

The only proviso is if the couple had made arrangements whilst both were in sound mind that if something like this happened be it alzheimers, a debilitating stroke, or whatever, that the power of attorney automatically falls to the partner.

As above, paying for power of attorney in these cases is very expensive.

Fruity1

Agreed you need a power of attorney which a solicitor can sort out. Every county/city social service dept works slighly differently. They will ask you for details of bank accounts try to avoid showing them these if necessary just play dumb until you can move the money if possible into another/your name (this money can always pay for little luxurys for your relative). It can be hard going GOOD LUCK x

Cute_'n'_Quirky

Sorry but this cannot be done if the house is in joint names.

Any transfer must be done before the condition is present.

minimadtrix

wowzetov wrote: »

Can the parent give power of attorney even when in a deteriorating state of mind?Finally, if family cannot sell the home how can they be authorised to rent it out?

Power of attorney is given by a solicitor because the parent is unable to make the decision themselves. That is why before anything can be done this has to be achieved. I'm not sure how much it would cost - it was straight forward an no more than £100 when we looked at doing it for my MIL in 2002. Not sure why it should now cost 20k!!!

Errata

A person who does not have mental capacitycannot agree to someone else having their power of attorney, as the person will be unable to understand what it means and will be unable to give informed consent. However, the court of protection can appoint a guardian to take financial decisions on the persons behalf. More info if you google court of protection.
This means that the house can be sold if the guardian feels that is in the person's best interests and the money realised by the sale will pay the care home fees. More info available on Age Concern website factsheets. Or read the relevant threads on the Slversavers thread where this has been thrashed out to the nth degree.

Errata

minimadtrix wrote: »

Power of attorney is given by a solicitor because the parent is unable to make the decision themselves. That is why before anything can be done this has to be achieved. I'm not sure how much it would cost - it was straight forward an no more than £100 when we looked at doing it for my MIL in 2002. Not sure why it should now cost 20k!!!

Power of attorney is granted by a court, not a solicitor. More info on the website and NB there are changes due to come into operation quite soon.

Cute_'n'_Quirky

A Guardian is a totally different thing to Power of Attorney.

That friend of mine was told that as a Guardian the house could not be sold, only by PoA which would cost £20K to obtain.

There are a lot of problems associated with elderly relatives but, unfortunately, it is not always possible to get your hands on their money from property in this way.