Deprivation of Assets... Real life outcomes???

Xbigman

Those who have assets to hide don't come on sites like this and ask how to do it.
Those who are legit do come on here and ask what the rules are thus there are quite a few threads on the subject.
Those who have run into trouble already generally accept the situation.

I do recall a thread where a family had some endowments, cashed them in and stuck them in an ISA rather than reduce the mortgage. Now unemployed they can't reduce the mortgage as its DoA. It happens.



Darren

xylophone

It's an interesting thread for me at this moment in time. A neighbour's house has just gone up for sale after he has gone into a care home. He gifted his house to his son six years ago. I have no idea whether our local authority will pursue this as DoC, but I have read the above with interest.

https://www.aprilking.co.uk/2017/01/30/deprivation-of-assets-guide/

Notional capital: an example
Let's say you transfer the title to your house to your only son, and carry on living in it. Your house is worth £100,000 at the time of the transfer. This leaves you with assets of just £20,000.

Some time afterwards, you need care and the Local Authority performs a means test. They note that you have transferred your house to your son, and that its current value is £130,000. They decide that there is no reasonable explanation for you making this transfer, except for avoiding having to pay for care yourself. The Local Authority will therefore treat you as if your total capital is the current value of the house plus your remaining assets i.e. £150,000 ; even though you no longer technically own the property.

You will therefore be expected to pay for the full cost of your own care. The £20,000 you retained will be used in full initially (as you are deemed to have £150,000, not £20,000) but after this is gone, with the title transferred to your son, you wont be able to sell your home. At this stage, the Local Authority have an obligation to provide care but they can seek recovery of the payment of care fees using debt recovery methods (see e.g Robertson v Fife [2002] UKHL 35).

kingfisherblue

Thanks xylophone. The house was gifted to avoid care home fees. There were three houses sold in the same street, and of the same style, at the time. They were sold at £110k, £120k and £127k.

Currently houses in the same street, again the same type, are around £180,000.