Can you create a trust to avoid losing inheritance to a means tested caring costs

Keep_pedalling

EdwardB wrote: »

It is a lot worse than you think.

First of all anything you try to do to get rid of it can be undone for up to 7 years back,

He needed to make a gift of it to family 7 years before death or needing a care home.

So having done all the right things, worked till he dropped, paid into the system, with the hope that his children would have a slightly better chance than him he now faces losing it all.

The local authorities are total scumbags in these situations, whether you own a home or not, they basically do everything they can to not pay and if you can't then he goes into the places they decide which are awful.

They take all his income, pension the lot, they and others argue about whether his condition is social or medical so they can pay less.

I think the max they pay is £500 a week, but that includes the moneygrab of state money he was entitled to, you pay the difference. Our bill was £5800 a month less their contribution.

So unless you have a time machine, he could sell the house at market rates, develop a gambling habit and spend the lot. Actually some people do this as a way to hide money, they go to a dozen casinos, get £5k to £10k of chips, do not gamble much and then cash in the chips for cash.

So where do you think these "scumbags" are going to magic the money to pay for everyones care costs from? If as a society we are not willing to pay the level of taxes required to give free residential care to all, then it is pointless going on a rant about the people who have to work within the extreme budget restraints they are faced with.

My mother is funded by the LA, but she also has to contribute all of her SP and PC, but apart from the weekly hairdresser and the odd magazine she has no other expenses, so it does not seem an unfair deal to me. The fact that she is safe, warm, well cared for is all that matters to me.

Pollycat

EdwardB wrote: »

It is a lot worse than you think.

First of all anything you try to do to get rid of it can be undone for up to 7 years back,

He needed to make a gift of it to family 7 years before death or needing a care home.

So having done all the right things, worked till he dropped, paid into the system, with the hope that his children would have a slightly better chance than him he now faces losing it all.

The local authorities are total scumbags in these situations, whether you own a home or not, they basically do everything they can to not pay and if you can't then he goes into the places they decide which are awful.

They take all his income, pension the lot, they and others argue about whether his condition is social or medical so they can pay less.

I think the max they pay is £500 a week, but that includes the moneygrab of state money he was entitled to, you pay the difference. Our bill was £5800 a month less their contribution.

So unless you have a time machine, he could sell the house at market rates, develop a gambling habit and spend the lot. Actually some people do this as a way to hide money, they go to a dozen casinos, get £5k to £10k of chips, do not gamble much and then cash in the chips for cash.

In the interests of accuracy, do they actually take 'the lot' - all income, all pension?

I thought if care is being paid by the authorities, you are allowed a certain small amount per week from your income/pensions for yourself.

Keep_pedalling

Pollycat wrote: »

In the interests of accuracy, do they actually take 'the lot' - all income, all pension?

I thought if care is being paid by the authorities, you are allowed a certain small amount per week from your income/pensions for yourself.

Any savings between £14250 and £23,250 are deemed to produce income at £1 per week per £500, so if you have saving near the top end of that figure, then that assumed income will make up the bulk of your allowable weekly expenses, so in effect this means more of your pension payments will go on your care contribution.

Torry_Quine

EdwardB wrote: »

7 years is what the local authority said, but hey why not let them roll back to the begining of your mortgage.

Seven years may be the rule for you local authority but its not the general law. It's about whether the intention was to gain the free care.

Person_one wrote: »

If people want free social care to be available for everybody who needs it, they need to petition the government to raise taxes to fund it, or vote for the political party that promises to do so.

The councils have to meet the needs of everybody in their area with very limited funds and central government is not stepping in to help them. Funding for all kinds of care is a low priority at the moment.

Totally agree.

Keep_pedalling wrote: »

So where do you think these "scumbags" are going to magic the money to pay for everyones care costs from? If as a society we are not willing to pay the level of taxes required to give free residential care to all, then it is pointless going on a rant about the people who have to work within the extreme budget restraints they are faced with.

My mother is funded by the LA, but she also has to contribute all of her SP and PC, but apart from the weekly hairdresser and the odd magazine she has no other expenses, so it does not seem an unfair deal to me. The fact that she is safe, warm, well cared for is all that matters to me.

well said

Mojisola

Pollycat wrote: »

In the interests of accuracy, do they actually take 'the lot' - all income, all pension?

I thought if care is being paid by the authorities, you are allowed a certain small amount per week from your income/pensions for yourself.

£23 a week.

A further point of accuracy - if you are self-funding the council does not 'take your house' or otherwise 'force' you to do anything. You have a contract with whichever care home you have chosen and you have to pay the bill directly to them, just as if you were staying in a hotel.

Almost everyone who needs to live in a care home can also claim health benefits (Attendance Allowance in the case of older people).

If the person needing care can pay the bill using state and private pensions, benefits and savings, then their house doesn't have to be sold.

If the person needing care or someone with POA for them can cover the weekly cost by renting out the house (as well as the list above), again it doesn't need to be sold.

When Dad needed to go into care, I was very pleased that we were able to chose a good home where he was happy - I visited the home that accepted LA-funded clients and I just couldn't have left him there. I don't know what we would have done if that had been his only option.

Fortunately he had our 'inheritance' to spend on somewhere nicer.

onlyroz

Person_one wrote: »

If people want free social care to be available for everybody who needs it, they need to petition the government to raise taxes to fund it, or vote for the political party that promises to do so.

The councils have to meet the needs of everybody in their area with very limited funds and central government is not stepping in to help them. Funding for all kinds of care is a low priority at the moment.

Unless of course you live in Surrey, where the council apparently got a special back-door deal to help pay for social care without having to massively raise Council Tax.

Gavin83

EdwardB wrote: »

The local authorities are total scumbags in these situations, whether you own a home or not, they basically do everything they can to not pay and if you can't then he goes into the places they decide which are awful.

I don't think you can blame the local authorities for this. Firstly they don't set the laws on this. Secondly if your asking them to fund what is very expensive care I think you should somewhat follow their rules. And yes they will use residential care as a last resort and rightly so. I also don't think you have a right to expect an expensive top of the range home and ask the LA to fund. They're expensive for a reason.

EdwardB wrote: »

7 years is what the local authority said, but hey why not let them roll back to the begining of your mortgage.

Torry is right on this there is no definite limit but each council is somewhat free to impose its own limits if it wishes. I'd imagine 7 years is around average, our council was less. Essentially it becomes harder to prove the longer it's been so it reaches a point it's no longer worth pursuing. However I have seen people taken to court for the costs when a property has been disposed of.

Pollycat wrote: »

In the interests of accuracy, do they actually take 'the lot' - all income, all pension?

I thought if care is being paid by the authorities, you are allowed a certain small amount per week from your income/pensions for yourself.

They get a personal allowance, it's around £25pw I think.

Pollycat

Keep_pedalling wrote: »

Any savings between £14250 and £23,250 are deemed to produce income at £1 per week per £500, so if you have saving near the top end of that figure, then that assumed income will make up the bulk of your allowable weekly expenses, so in effect this means more of your pension payments will go on your care contribution.

That wasn't what I meant.

Mojisola wrote: »

£23 a week.

Gavin83 wrote: »

They get a personal allowance, it's around £25pw I think.

Mojisola and Gavin83 understood.
I actually knew EdwardB was wrong in stating that they 'took the lot' but wasn't sure of the exact amount as it's over 5 years since I did my research when Dad went into a care home.
He was self-funding (silly us for not setting up a trust fund to protect our inheritance :cool:) and died before his savings reached the £23,500 threshold.

getmore4less

Gavin83 wrote: »

Didn't the Government increase this to around £1m recently?

Not really.

https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band

I have not read up on the details but the simple summary is

If you have/had a property and leave its value to issue(kids and their kids etc) then there is an additional £175k nil rate band

(Phased in by 2021).


The £1m comes from 2*£325 + 2*£175 so only applies to married* people with kids.


(* That includes civil partners and adopted kids)

Keep_pedalling

Keep_pedalling wrote: »

Any savings between £14250 and £23,250 are deemed to produce income at £1 per week per £500, so if you have saving near the top end of that figure, then that assumed income will make up the bulk of your allowable weekly expenses, so in effect this means more of your pension payments will go on your care contribution.

For accuracy that should read £1 for every £250, so if you have between £19,001 and £23.250 in savings your personal expenses allowence will be wiped out, so you savings will slowly diminish towards the lower limit.

This is supposed to change to a more generous system in 2021, but as that was originally planed to happen last year I would not be surprised to see that kicked into the long grass once more.