Deed of Variation for someone mentally incapacitated

xylophone

Perhaps you should run this past the OPG?
I cannot for the life of me see how a DoV would be in the best interests of the beneficiary.

naedanger

I wonder if what is being proposed is along the following lines:

No deed of variation to your mother's late aunt's will. Instead your mother inherits that property.

A sibling moves in to live with your mother in her existing home. That sibling receives the rental income from the inherited home, but that is not sufficient to give her the £45,000 per annum income. The shortfall is effectively accumulated until your mother dies. 

Following your mother's death (hopefully far in the future) the siblings agree to a deed of variation to your then late mother's will to enure the carer is repaid, and then the balance split equally between all the siblings. 


If this is the proposal I can see potential areas for concern. But it is not quite the complete "no go" that a deed of variation to your mother's late Aunt's will seems.

PS But if this is the proposal, I still don't like it. (I don't think a rental property is a good asset for someone in your mother's circumstances e.g. what if there were problem tenants in future, or if the sibling eventually could not cope as the care needs increase etc.)

Drumpound

Thanks, It does help.
I will update after the meeting. 

Drumpound

naedanger said:

Drumpound said:

She will just be inheriting a house worth £350k, nothing else. However,  it does have paying tennants in.
She has approx £2k cash reserves.
She doesn't own the property she lives in.
She prefers to stay in her current property and receive family care in her famiiliar surroundings. Its very difficult to persuade her to leave her house.

My guess is what is being proposed it to help hang on to the house, which will be more for the benefit of your mother's heirs rather than your mother .  

Could it be that the solicitor is proposing that a deed of variation be made to your mother's will in the future after she dies? (I was assuming the deed of variation was to your mother's late Aunt's will.) 

Thats is correct to to a large degree. 
Any funds saved by not paying the £55k per year, accumulated appreciation in  the house and rental revenue will leave a larger pot.
There is a better chance of inheritance but probably wont amount to much, if we were to be legal with a DOV. The intention once a Nursing home is required,  is to be in a position to choose as high a standard as possible.  From what I gather, if there are insufficient funds, the Local Authority choose the Nursing Home.  If there are funds at her disposal,  there is the opportunity top up the council's allowance of £50k. (Which many care providers say isint sufficient,  so if you want a decent one, you need to pay a higher rate of approx years at £70 to £80k per year.
There is a chance of inheritance (however,  our mother is physically fit and never smoked or drank). A  spilt by 5, after 45k per year then £75k per year, it is unlikely to amount to a great deal left from £350k

nanapop1977

Does mum live in England?
I'm pretty sure in England, local authorities will only fund care home fees if the service users assets are less than £23k,  so if mum owns a property that she doesn't live in valued at £350k,  she would be expected to fund her own care until such time as her assets are sufficiently depleted. I think LA will allow about 3 months grace to enable POAs to sell the house but it might vary in different areas. 

Not_a_clue

Aside from the loan/deed of variation issue an earlier poster pointed you to the Office of the Public Guardian.  The following link contains useful advice on family payments.  I imagine if the OPG approves an application for a family payment then it would be much harder for a local authority to claim deprivation of assets.  
https://www.gov.uk/government/publications/public-guardian-practice-note-family-care-payments/pn2-family-care-payments-web-version

Keep_pedalling

Sorry but this is just nuts. You can’t carry out a DoV on behalf of someone who does not have the capacity to do so. Even if she did have the capacity to do it herself it would fall under deliberate  deprivation of assets.

If someone is going to be paid to care for her, then there is the issue of income tax, NI and pension contribution to be considered, you can’t just take the money retrospectively from her inheritance. 

Chances are that the person giving up their job to care full time, will soon come to regret that decision as it is a nightmare job that get worse as time goes on, and eventually residential care is likely to be needed and her inheritance will have to pay for it, but at least self funding provides more options as far as choice of home is concerned.

Dox

The idea that property is only going to appreciate may turn out to be horribly wrong.

elsien

Drumpound said:

naedanger said:

Drumpound said:

She will just be inheriting a house worth £350k, nothing else. However,  it does have paying tennants in.
She has approx £2k cash reserves.
She doesn't own the property she lives in.
She prefers to stay in her current property and receive family care in her famiiliar surroundings. Its very difficult to persuade her to leave her house.

My guess is what is being proposed it to help hang on to the house, which will be more for the benefit of your mother's heirs rather than your mother .  

Could it be that the solicitor is proposing that a deed of variation be made to your mother's will in the future after she dies? (I was assuming the deed of variation was to your mother's late Aunt's will.) 

Thats is correct to to a large degree. 
Any funds saved by not paying the £55k per year, accumulated appreciation in  the house and rental revenue will leave a larger pot.
There is a better chance of inheritance but probably wont amount to much, if we were to be legal with a DOV. The intention once a Nursing home is required,  is to be in a position to choose as high a standard as possible.  From what I gather, if there are insufficient funds, the Local Authority choose the Nursing Home.  If there are funds at her disposal,  there is the opportunity top up the council's allowance of £50k. (Which many care providers say isint sufficient,  so if you want a decent one, you need to pay a higher rate of approx years at £70 to £80k per year.
There is a chance of inheritance (however,  our mother is physically fit and never smoked or drank). A  spilt by 5, after 45k per year then £75k per year, it is unlikely to amount to a great deal left from £350k

Over 23K assets mum would be fully self funded and her own assets would be used. As a self funded she could claim attendance allowance but little else. There isn’t a 50k per year allowance for self funders, I’m not sure where you’ve had that from.  (Unless health funded which is only for people with complex nursing needs, in which case her fees would be covered by health.)
Under 23K, then the LA would step in. However if she’s in a more expensive home they could potentially move her to a cheaper one. Family would then need to decide if they were willing/able to pay a third party top up themselves out of their own finances. There would be no obligation to do this but the question is often asked, to allow someone to stay put.
There are good facts sheets about funding care on the Age Uk website. 

badmemory

Are you sure the charities can be fully paid from cash?  If not this won't work anyway.