Care Costs & Gifting

Questions4Forumz

Hello all,

A bunch of questions below, for your wisdom. 

My Grandmother (86) has recently gone into a nursing home and is not currently eligible for any contributions so will be self funding. Her house is up for sale, of which she owns 50%. The other 50% belonged to my Grandfather who left it in trust to my Mother upon his death. A clause in his will states that any interest generated from the sale proceeds should be used to my Grandmothers benefit, if it benefits her.

Once the house sells she will have roughly £570,000. Care costs are £68,500 (-£25,000 income = £43,500). 

My Mother will potentially be heading into unemployment due to COVID-19 infection side effects. Leaving her with a shortfall of £500 a month. Given she is in need of capital, is she able to tap into her share of the house - or is my Grandmother allowed to gift her this money (say 5 years worth of shortfall capital £30,000) to fill the gap?

My Grandmother also prior to going into care expressed her wish to gift £60,000 to be equally split amongst her two grandchildren. Now that she is in care can she still do this? I read that being in care doesn't necessarily remove your right to gift money - and £90,000 in the grand scheme of things isn't going to highly impact her ability to pay for care. 

For reference, we hold Power of Attorney. 

Savvy_Sue

If you are acting as her Attorney, you are only allowed to do things which benefit your grandmother. 

If she still has capacity, she can do what she likes, write cheques galore etc, but if you are doing the gifting / moving / selling then your only question has to be "is this in granny's best interests?"

I'm not really understanding that clause in granddad's will - is your mum required to invest her half of the proceeds and give the interest to granny? You might need legal advice on the exact wording. 

Keep_pedalling

It sounds like you GM will have ample assets to fund her care even after gifting, so as long as she still has the mental capacity to make her own decisions then yes she can make those gifts.

As for the trust, I think you need yo take legal advice on how to proceed with that. It would seem that she has no need of the income so it may be possible to wind the trust up after the sale.

sweetsand

Legal advice needed as these type of gifts, ie passed on to OH to avoid care home payments are a minefield

I'm not to sure if there will be enough money for the care home in within the M25 as they can  easily be 6/7k a month in london and if anyone has dentia thay could be around for many yars as in the case of one of our relatives.

Keep_pedalling

sweetsand said:

Legal advice needed as these type of gifts, ie passed on to OH to avoid care home payments are a minefield

I'm not to sure if there will be enough money for the care home in within the M25 as they can  easily be 6/7k a month in london and if anyone has dentia thay could be around for many yars as in the case of one of our relatives.

The OP already knows the costs of care, and even after the proposed gifts would seem to have sufficient assets to self fund for over 10 years, so there is no attempt to avoid care costs here and, as long as she has the mental capacity, I can see no reason why the gifts could not be made.

euronorris

Solicitor can advise re Will and house, but sounds like a life interest trust. Your nan has a right to the income during her lifetime, and your mum has an absolute right to the capital once your nan has passed. But only then, ans not before. IF it is that type of trust, and I STRONGLY urge you to get both legal and financial advice, then no, your mum cannot access any capital before your nan passes. The money may well need to be invested, and there could still be IHT implications also.

Re gifting, if nan does not have capacity, then it's highly likely to be no. Even with cspacity, I would caution against it. Care fees are not static. They increase by about 3.5% pa, and her needs may well increase, thereby increasing the fees.

You really need to get advice, both legal and financial. 

Grumpy_chap

Some of the terminology used in the OP seems a bit strange.  It might be worth going back to check actual wording in the Grandfather's will (rather than possible para-phrasing) and if it remains unclear ask for a Solicitor to correctly interpret.  If the original will was drawn up by a Solicitor, then it is unlikely too use incorrect phraseology.