Ideas please

cirhossa1

Hi there,

My mum is elderly and is needing to move into a smaller property soon.

We are considering having a garage conversion so I can look after her and so she can live near me.
Mum will be paying for this, but are there any financial pitfalls we need to be aware of?
Thank you

xylophone

https://forums.moneysavingexpert.com/discussion/comment/75070996#Comment_75070996

Is the property your mother intends to sell owned by her and your stepfather?

cirhossa1

Thank you for your response. The property is ours and mum would be giving up her rented home.

xylophone

Your mother will be using her personal savings to improve your property.

It might be better if she lent you the money and you repay her monthly less her share of household bills?

This would prevent potential problems with "deprivation of capital" should your mother end up requiring means tested care?

squirrelpie

you repay her monthly less her share of household bills?

One of her household bills would be market-price rent for the accomodation, yes? So the balance of the loan would decrease reasonably quickly.

cirhossa1

I’m so new to this.. what is deprivation of capital?

p00hsticks

cirhossa1 wrote: »

I’m so new to this.. what is deprivation of capital?

If your mother gives away her savings this is seen as depriving herself of her capital.

If she is, or later needs to, claim any means tested benefit (e.g. pension credit, council tax reduction) or have care needs funded by the local authority, then DWP and the local authority may treat it as if still had the money and therefore she may not be eligible for the benefits.

xylophone

https://www.which.co.uk/later-life-care/financing-care/gifting-assets-and-property/gifting-assets-what-are-the-rules-alp865l0wlum

lisyloo

Mum will be paying for this, but are there any financial pitfalls we need to be aware of?

If the garage is hers it may need to be sold/liquidated if/when she needs long term care.


As others have said pay for it yourself and charge her market rent.
If this is less than or equal to her current rent then that should be fine.
Keep records so that you can prove this in future.


If she has more than the threshold (£23,250 in England) the she would have to pay for long term care when/if it is required.


In the meantime she may be entitled to have carers attend up to 4x1hour visits per day and you would entitled to respite.
There might also be a day care center she can go to if she enjoys company.
Our parents both received carers visits and the threshold was about £300 per week of income, so they didn't have to pay for it (but privately it was £15 per hour).
My MIL went to a day care center. They provided transport and a escort as she was in a wheelchair. She only had to pay about £5 for a 2-course lunch. There was singing, bingo, cards etc. and she really enjoyed it whilst she was able to go.


Our social services in BANES seemed quite enlightened as they seemed to understand that keeping people well and out of hospital/care homes is ultimately cheaper/better. They were also able to see through my FIL saying he was "fine".

It is a postcode lottery and some are less good.



Are you claiming carers allowance?
Is she claiming attendance allowance, pension credit?


Does she have an LPA in place?
If not you should do this.
My MIL refused and I have recently had to go to the court of protection.
That took 6 months, so get it in place before you need it.

Fermion

Often the best way to handle "Granny Flat" type conversions (paid by the Parent) is to change the Land Registry Title Deeds post conversion from the Normal Joint Tenancy to Tenants in Common (for the combined property - Main Property + Garage Granny Flat) with the percentage equity for your Mother reflecting the value of the contribution she made tor the conversion.

However I would then suggest that you set up a separate Deed of Trust (signed by all parties) which states that in the event of a sale of the converted property 100% of the proceeds of the sale goes to you and your Spouse with 0% to your Mother. In that way you avoid being tied in to your property even if your Mother eventually has to move into long term care.

Best to talk to a Solicitor to explain the best options and handle the Land Registry changes