If It's Not One Thing It's Your Mother

L-Jay

Hello everyone, not sure if this is in the right place but here goes...

My mum has scrimped and saved her whole life to look after me and my brother, both of us are now left home and my mum is 63. She has a small mortgage (about 12k) on a house that's probably worth about 120k, recently she's begun to worry about what will happen to her house if she has to go in to a home - she is fit and healthy and probably will outlive us all but y'know.

I wish she'd just take the equity out of her house and enjoy it, but she's not like that. So what she wants to do is turn the house over to me and my brother, currently she's asking anyone who'll listen for advice!! She's been to Age Concern and they've said that this is not possible. Is this true? Is there any other options she can consider?

She's retired and on state pension (with pension credit), she considers herself comfortable with this weekly income.

Any help or recommendations of where to go to for advice would be much appreciated.

Thanks.

misty

I'm not a legal expert - perhaps this could go in a different category for more specific help but I'm fairly sure she can sign the house over to you. I have a vague notion of inheritance tax (and avoising it) something to do with signing it over at least 7 years before she dies. I'm not sure of the ins and outs of it though.

Could you and your brother not get toether with her and discuss what you'd like her to be able to do with the equity - a holiday etc.

L-Jay

misty wrote: »

I'm not a legal expert - perhaps this could go in a different category for more specific help but I'm fairly sure she can sign the house over to you. I have a vague notion of inheritance tax (and avoising it) something to do with signing it over at least 7 years before she dies. I'm not sure of the ins and outs of it though.

Could you and your brother not get toether with her and discuss what you'd like her to be able to do with the equity - a holiday etc.

I have, I'd love her to take a holiday of a lifetime or summat but she just won't have it. She sees anything like that as a waste, I wish I'd inherited her good sense to be honest.

The 7 year thing is jolting something in the depths of my mind:o

Thanks for the reply.

andyrules

I've a feeling the 7 years thing might be something to do with the state selling your home to pay for your care, but I'm not sure. This might be better on anther board, meanwhile have a look at this

http://www.willpeople.co.uk/iht.htm

ceridwen

have a vague idea Misty might be right - worth investigating.

frannyann

Hi L-jay! Not sure about legal point considering tax, but can advise regarding current rules regarding house in regards to paying for care and I get alot of my info from nursing homes fees association ( if you want to google) Contary to popular belief social services do not have a time limit on when the house has been passed to other members of the family (its very common so not sure what age concern were advising?) they will only look if it has been passed to intentionally deprive themselves of an assest to try and get "free" care. This is the same with money, shares, isa's etc. Equity release is quite common but get very specialist advise on this area as mum could end up leaving you with problems, as often these schemes are in effect a mortgage on the house to be paid back after death, and at 63, I hope your mum is a very long way off that!!

Kimitatsu

Your mum needs to take proper legal advice because the capital gains tax has changed within the last 12 months and the advice below is only feom memory!

If you get the equity in the house now then you gain it at todays valuation but you pay inheritance tax on the amount it is valued at when your mother passes away (could be a lot!) and that is assuming she outlives the gift by 7 years.

Also if she has to go into a home then your local council can take the view that she has deliberately deprived herself of assets which could have been sold to pay for her care and ask you to pay for her care instead.

Savvy_Sue

Look on the Silver Savers board, there's a few threads about this kind of thing over there. Tell her to listen to MargaretClare who points out that very few people end up needing care in care homes, and when they do it's not usually for that long, so really there's no point worrying about it!

localhero

The sad but true statistic is that 1 in 4 women will suffer from some sort of dementia in their life and 1 in 6 men likewise. No statistics are available for those who wind up in care or are instead looked after at home. But from the numbers it's an issue that needs to be considered very carefully by everyone.

Married couples can effectively minimise against the liability for the fees with a carefully drafted will, but for the sole owner of the home it's not so easy.

As per previous posts, you can no longer hand over the home to relatives to deprive the care home their fees. That was something that may have worked years ago, but times change.

Your mother could theoretically mortgage the place up to the hilt and spend the money, but then she may have to service a mortgage for ever and a day.

A chat with an IFA may provide other options, but I feel there are no easy answers other than for her to try and stay healthy.

margaretclare

Hi

Have a look at this: http://forums.moneysavingexpert.com/showthread.html?t=507235

This type of question comes up time and time again in various forms. There is an idea out there that it's possible to give away your home, preferably to the people you think should inherit it, but continue to live in it yourself.

Read that thread. The same question gets asked over and over again on here.

Regarding your mum, I sympathise with her. She has done a great job, bringing you up, giving you a great start in life. She's now 'comfortable' you say, and she feels she should have summat else to worry about?

When I was her age I was in love all over again following widowhood and redundancy. I was scratching for a living doing menial jobs. A decade later, I'm happily married, have more than enough to live on, enough to save (!!) and am in love with a wonderful man. So, life turned round for me, completely unexpectedly. It may yet happen for your mum. At 63 she's a spring chicken and she's got a lotta living still to do! The way she is talking, it's all over. Nothing to look forward to but sitting in some god-awful care home being dragged out of bed at 5 am, put back to bed at tea-time, and waiting for the undertaker. She could easily live another 20+ years, and who knows what can happen in that time? She can hopefully go on living in good health.

I would agree with her about holidays. Not much fun on your own - tried it. However, there is no shortage of things to get involved in, which give a meaning to life. The best may yet be to come, who knows! Good luck to her.

HTH

Margaret

L-Jay

Thanks for all the replies, spesh Margaret Clare - that was quite lovely!