Care Homes and paying for them

bustercarole

can anyone please advice on the correct answers to give. My father is 91 and has just been diagnosed with Alzheimer’s Dementia. Approx 8 years ago when he was of sound mind, he signed his flat over to my sister and I, our inheritance, should anything happen to him.
Because of his diagnosis we are looking to find a dementia home.
We have been told that because of his savings he will be self funding, we have no problems with that, it was then pointed out that his flat even though it had been signed over to my sister and I, would then be considered unless we gave the right answers. Apparently signing it over albeit 8 years ago for inheritance purposes does not count.
Can anyone please advise on what we can do or say to help my dad and my sister and I save money.

Thank you.

Mojisola

If he signed it over to you so it couldn't be counted as his asset if he ever needed care, it would count as deliberate deprivation. 

comeandgo

Dear god, in your fathers last years of life you are looking at saving money so you can increase your inheritance.  Give him the care he deserves.  

Mojisola

bustercarole said:

Apparently signing it over albeit 8 years ago for inheritance purposes does not count.

If you mean it was signed over with the intention of saving on inheritance tax, then you were badly advised.

As he continued to live in the house, unless he paid rent to you, it will still be counted in the IHT calculations.

As he is going to be self-funding to start with, no-one will be interested in the ownership of his home.

If he uses up most of his money and needs to claim benefits, then it will be investigated.

Silvertabby

Once your father's money runs out, one of two things will happen:

1.  Signing over the flat to you and your sister will be deemed to be deprivation of assets, and it will have to be sold to fund his ongoing care.

2.  It will somehow be deemed not to be deprivation of assets - and your dad runs the risk of being transferred to a cheaper 'over my dead body grove'.  

What is more important to you - your 'inheritance' or your dad's comfort in his final years?

p00hsticks

bustercarole said:

Can anyone please advise on what we can do or say to help my dad and my sister and I save money.

Unfortunately it's probably too late now - it would have been better to have asked eight years ago.

As Mojisola says (and assuming you and your sister aren't actually living in the flat), unless he's been paying you full market rent since signing it over too you, the flat still forms part of his estate for inheritance purposes, so it's saved nothing in Inheritance Tax.

And (again assuming neither you or your sister live in the flat) you and your sister will potentially be liable for Capitial Gains Tax on any rise in value from when it was signed over to you, so that's an additonal cost.

And there's a chance that if his own care home funding from savings runs out the Local Authorities may deem the transfer as deliberate deprivation, in which case they won't provide funding.

It isn't often a good idea to do this sort of thing, I'm afraid, especially without getting the correct advice. I'm sorry,

Savvy_Sue

But let's get practical: do you / your sister / anyone else have Power of Attorney for your father? If you do, remember that whatever you do must be in your father's best interests, and that does not extend to improving your inheritance. If you don't, then you might want to apply to be his deputy: same rules apply. Take a look here for starters. 

You could take advice now: if it seems likely that your father signing over the flat is to be treated as Deliberate Deprivation of Assets, then selling it (always assuming neither of you is living in it) and setting the proceeds aside to put towards his care might be a good plan, OR renting it out to provide an income to go towards his care. But set the money aside for this purpose, rather than using it to enrich yourselves.