Grandparent has a large amount of cash

Kfent111

My grandfather has recently passed away and we've been helping my grandmother to sort out their finances. She has revealed that they have a pretty large amount of cash hidden away in the house which has built up over the years.

She doesn't want to pay this money into a bank account as she fears that it would get swallowed by care home fees if she ever had to go into care. Gifting it to family members so that they can pay it into their bank accounts has also been discussed, but there are worries about having to pay IHT on it.

I've seen reference online to putting the money into a trust to protect it from being used for care fees. Would this work? And would you have to pay any tax if it was held in a trust?

Are there any other options available other than stashing it back under the bed?!

Alice_Walker

Why would she not want it to go towards her care fees? What else is she saving it for?

Where has the money come from? If she has a financial assessment for care they will look at bank statements, if there are anomalies (like large amounts of money being withdrawn without good reason) they will ask why, and can treat her as having the money not accounted for. The same with a trust or giving it away, intentional deprivation of capital means she will be treated as still having the money.

Kfent111

We think that it's money that her and her husband have been withdrawing from their accounts for years, possibly decades. It's from her husbands wage when he was working, plus any money left over from them withdrawing their pensions.

From what we've gathered, we think that they didn't trust that the money would be safe in their accounts, so made regular withdrawals.

ohreally

Kfent111 wrote: »

She doesn't want to pay this money into a bank account as she fears that it would get swallowed by care home fees if she ever had to go into care.

Who would she prefer to pay care home fees for her, tax payers?

Savvy_Sue

Just because it's stuffed under the mattress rather than in a bank account doesn't mean it shouldn't be declared IF she has to go into a care home. Likewise if she's claiming any means-tested benefits.

tacpot12

The money would have been, and will be safer in her bank account, but trying to convince her at this stage might be difficult. It is worth checking with her that she is okay about it, the idea might hav mostly been your granddad's.

If your grandmother still wants to keep large amounts of money in the house, buy and install a floor safe, and a hidden security camera to watch it.

I would look to make sure she has a Will and an Power of Attorney in place as soon as possible. If she looses capacity to act, her Attorney will need to move the cash to a Bank Account, so making sure the Attorney has one key to the safe will save time.

Keep_pedalling

Giving some away may be fine, but that depends on how much we are talking about and how many other assets she. How much are we talking about and is she a homeowner?

Andypandyboy

May not be a popular view (depending on who you ask) but I would (if that is what Grandma wants) just distribute it quietly between her family.

Keep_pedalling

Andypandyboy wrote: »

May not be a popular view (depending on who you ask) but I would (if that is what Grandma wants) just distribute it quietly between her family.

No one should give their assets away and leave themselves vulnerable in old age. Hopefully her children will recognise that and talk out out of impoverishing herself. Keeping large amounts of your savings in cash is bonkers, apart from the risk of losing the lot by being robbed inflation will have eroded its value, and all chance of obtaining decent growth through investment is lost.

Andypandyboy

Keep_pedalling wrote: »

No one should give their assets away and leave themselves vulnerable in old age. Hopefully her children will recognise that and talk out out of impoverishing herself. Keeping large amounts of your savings in cash is bonkers, apart from the risk of losing the lot by being robbed inflation will have eroded its value, and all chance of obtaining decent growth through investment is lost.

My comment pre supposed Grandma was otherwise well provided for in terms of income and assets.

elsien

If it's in cash and it's been there for years, your grandmother may want to double check whether it's all still legal tender.