elderly aunt wants to give us some money

paperman27

Hi,

An elderly aunt (90yrs old) has considered the possibility that she may have to go into a care home, we/she has read horror stories of people being ripped off when entering these homes and she would like to share out some of her money NOW before there is any talk of her going into a home, she is currently in sheltered accomodation.

whilst we have no problem with getting the money as we act as executor and also draw her weekly money for her, we are worried that there may be some sort of legal reason for not doing this.

she receives savings credit, housing benefit, council tax benefit (and is also registered blind)

she is wanting to give £1000 each to 7 relatives, currently she has £41000 in savings, £30000 of that is in high interest bonds. with the rest just in her current account. We do not want her to get into trouble with any government bodies but this is her request for her money. I'm reluctant to do it without having checked first.

any advice would be welcome on this matter.

thanks
paperman27

monkeyspanner

It is actually illegal to deprive yourself of assets to avoid paying care home fees and councils have the power to recover the funds from the recipients. In practice if there is some time between the gift and your aunt going into a care home it is unlikely that the council would attempt to recover the money but may assess your aunt as though she still had the money. Rather than give £7000 away all at once it may be better to consider smaller amounts over a period.

Your aunt can have up to £21500 in savings before she is self funding. One problem that may occur is that care home fees arranged by the council may be lower than self funders in the same home. Once your aunt's savings reduce to £21500, and the council take over paying, the care home may expect to keep receiving her previous fee level and thus you may then be faced with having to top up your aunt's care home fees on top of the council contribution. Your aunt is not allowed to make the top up herself. If you cannot make the top up the council may then decide to move your aunt to a cheaper care home. Depending on your aunt's regular income her savings may last say 2 years, she could then be faced with a distressing move to a another care home. So in the event she is self funding it is important to be aware of the care home fees payable as a self funder and what the council might pay when she is no longer self funding.
e.g. in my MIL case she is self funding and pays £415 per week if the council were funding her their payment would be £314 per week(level 3 care assessment) for exactly the same service in the same care home. When her savings reduce to £21500 the family are faced with the prospect of finding £101 per week as a 3rd party top up to her fees. Fortunately for us this is unlikely to happen due to her savings but it is a possibility.

You should also be aware that even when the council start paying virtually all your aunt's income will have to be paid to the council as her contribution to her care fees. The only exception is a small weekly allowance this varies but for our area is £20.45 per week.

Hope this helps. You might like to look at this website for more info www.counselandcare.co.uk

Perhaps you can reassure your aunt that there will be £21500 left to distribute eventually. She can also continue to make the same sort of regular gifts at birthdays Christmas etc as she has always done even when self funding. there is also nothing to stop her spending the money on herself!

seven-day-weekend

Also I would be very careful as I don't actually think she is entitled to Housing and Council Tax Benefit if she has savings of over £16000. Someone will correct me if I am wrong.

paperman27

Thanks for the reply, she has allocated £30,000 of her money in her will but in the event of her going into a home i would assume that this would be void and only the 21,500 would be available for the will. this is the reason for her giving away some of the money early, not to try to avoid paying care home fees.

it seems a little harsh that a persons wishes cannot be fulfilled because of the system but i understand thats how it is for everyone.

thanks again for the reply, i will check out the website later.

tanith

paperman27 wrote: »

Thanks for the reply, she has allocated £30,000 of her money in her will but in the event of her going into a home i would assume that this would be void and only the 21,500 would be available for the will. this is the reason for her giving away some of the money early, not to try to avoid paying care home fees.

it seems a little harsh that a persons wishes cannot be fulfilled because of the system but i understand thats how it is for everyone.

thanks again for the reply, i will check out the website later.

Paperman you say that she does not want to avoid paying care home fees, but by giving the money away now that is exactly what she is doing in the eyes of the powers that be I'm afraid, fair or not that is how the system works for everyone....