Please help with conflicting advice

barnsleynanna

My 82 year old mother has recently been diagnosed with Parkinsons Disease Dementia. In July of this year, she sold her house and moved to a 70% ownership bungalow to be near us and be cared for. From the sale of her old house, she banked £60k profit and paid outright her £66,500 property (this being a 70% share). She is being cared for by family at the moment. When dad died, she insisted that the savings and banking all went into a joint account with myself. From there, I pay her bills, for shopping, outings, holidays, etc. Bearing in mind she will possibly need 24/7 care in the future, how does she stand with gifting the £60k in her joint account with myself to myself, husband, granddaughter and grandchildren. Since it's a joint account rather than my having power of attorney, I'm a little unsure. Her diagnosis is recent, and she has stated that she wants to buy us things rather than lose the money she and my dad worked for all their lives. Understand deprivation of assets, but she will still have a house valued at £66,500. Help????

molerat

It all depends on how that care is funded. If LA funded and means tested they will look at disposable assets, such as cash, and gifting that cash would be considered deprivation of assets. After she has died that money, as it is in a joint account, will become yours and not part of the estate. The house will then form the major part of her estate and any care related debts accrued can be taken from that. Tread very carefully over this money, it could cause you a lot of grief.

LindaMary

Certainly don't do it. It will be seen as getting rid of assets. Bear in mind care homes cost several thousand pounds a month

xylophone

In terms of IHT see http://www.accountingweb.co.uk/community/blogs/pd-tax/inheritance-tax-joint-bank-accounts

In the circumstances described, the view taken by the LA is likely to be that Mother provided all the funds in the account and that the account was held in joint names purely for her convenience ( so that her daughter could deal with paying her bills).

In any event, even if it were held that Mother had intended to make a gift of the cash to her daughter ( and it would be difficult to make such a case I think), she would be held to be the owner of at least half the cash - for this to be transferred to the daughter's/other family members' names now that she has been diagnosed with dementia would virtually certainly be regarded as deprivation of assets.

Whatever Mother may have liked to have happened to her money, the simple fact is that she now needs it for her own needs?

dunstonh

Bearing in mind she will possibly need 24/7 care in the future, how does she stand with gifting the £60k in her joint account with myself to myself, husband, granddaughter and grandchildren.

Clear case of deprivation of assets.

Since it's a joint account rather than my having power of attorney, I'm a little unsure.

There is no uncertainly here.

Her diagnosis is recent, and she has stated that she wants to buy us things rather than lose the money she and my dad worked for all their lives.

And she will still be able to do that once the balance falls below a certain amount. However, doing it now is deliberate to obtain benefits and there are rules in place to cover people doing that.

bigfreddiel

So if you deliberately deprive yourself of assets what happens next. Do you just get kicked out onto the street and told to go away?

Cheers fj

dunstonh

bigfreddiel wrote: »

So if you deliberately deprive yourself of assets what happens next. Do you just get kicked out onto the street and told to go away?

Cheers fj

A range of things can happen. It can result in being moved out of the current home into a cheaper, more basic home. Local authority care homes are not something you really want to wish on someone. Although it likely kill them quicker allowing the children to get their inheritance quicker. It can include putting a charge against the current property so the authority get their money back on death. It can also result in the children being chased to cover the money that was gifted or being required to pay the equivalent amount themselves in terms of the benefit that would have been had the gift not been made.

Really useful guide by age uk:
https://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

Section 7.2 & 8

It should also be noted that as this is classed as an attempt to potentially defraud the taxpayer, it can come under the money laundering reporting regulations (which includes benefit fraud). So, any professional involved would be obliged to report it if they suspected any wrongdoing. This includes, solicitors, accountants, advisers and bank staff.

xylophone

https://www.alzheimers.org.uk/site/scripts/documents_info.php?documentID=2710

http://www.alz.org/dementia/parkinsons-disease-symptoms.asp

may be worth a read.

xylophone

https://forums.moneysavingexpert.com/discussion/comment/69975365#Comment_69975365

This matter was discussed in an earlier thread.

System

Its not really a huge amount of money in the scheme of things, it'd help people for sure but not transform their lives, and perfectly within reach of saving-abilty if you combine money saving with aggressive investing

Its too late to save that amount and its not worth compromising quality of care or life over

bigfreddiel

dunstonh wrote: »

A range of things can happen. It can result in being moved out of the current home into a cheaper, more basic home. Local authority care homes are not something you really want to wish on someone. Although it likely kill them quicker allowing the children to get their inheritance quicker. It can include putting a charge against the current property so the authority get their money back on death. It can also result in the children being chased to cover the money that was gifted or being required to pay the equivalent amount themselves in terms of the benefit that would have been had the gift not been made.

Really useful guide by age uk:
https://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

Section 7.2 & 8

It should also be noted that as this is classed as an attempt to potentially defraud the taxpayer, it can come under the money laundering reporting regulations (which includes benefit fraud). So, any professional involved would be obliged to report it if they suspected any wrongdoing. This includes, solicitors, accountants, advisers and bank staff.

Cheers Dunsty nicely put, I guess a lot depends on the local authority, my 90 yr old mum has friends who didn't save a penny and have been put up in really nice p.aces, whereas others who could fund their own couldn't afford anything nearly as good - it's all a bit of a lottery! fj