How do we protect our parents savings?

586260Pc

My parents have around £90000 in savings and are worried that if one of them has to go in a home all of this will be used up fundi6their care. Resulting in the other one having nothing at all. Is there anyway of protecting some of the money?

Shedman

First simple step would be to make sure the savings are in joint accounts as then only 50% would be taken into account in any assessment to care home fees.  

But we probably need a bit more info about their situation to provide other suggestions e.g. what are their ages and state of health, are the savings all in banks or is any in shares etc, what pensions do they have and what would the other have if one died or went into a home, etc.


This is probably worth a read. https://www.ageuk.org.uk/globalassets/age-ni/documents/factsheets/fs39_paying_for_care_in_a_care_home_if_you_have_a_partner_fcs.pdf


Also if they are at the stage of being concerned about possible care costs do you (or other trusted person) have an LPA (Lasting Power of Attorney) for each of them in case they can no longer manage their finances? 

P933alilli

Firstly how imminent could they need care in a home? Are they elderly, do they suffer any health problems especially dementia? You need to start planning asap and as it stands I think you have to get below a £23,250 threshold so you need to get rid of £66,750. They can gift a certain amount each year, i'm not sure if its £3000 and you can do this for a prvious year too i think? If the careneeds are a few years away try to get them to spend more. 
  There is something called deprivation of assets where if youre obviously getting rid of more money than usual it can be investigated but some areas councils are more forgiving i think. They havent got a great deal of money so i wouldnt worry unduly.   Also, you need to look at if they own their own home and how its set up with the land registry and if they have shared tenancy .If there is only one parent with urgent care needs atm they cant force the other out of the home if aged 60+. Also i think 
    There is also the option of getting care at home which is cheaper.!

Albermarle

If they own their own home , this will be valued as an asset , so even if the savings were reduced by some method , they would still have to pay anyway . The only difference is that payment would be delayed until the house was eventually sold at a later date .

Even if they do not own their own home ,you/they  should think about what would happen if they did manage to get the savings down to the £23,250 threshold and one of them had to go into a care home. The quality of council funded places in care homes can vary a lot and some are not very nice.

Finally in fact most old people never actually need to go into a care home and those that do stay on average less than two years. More likely they will need care at home which is a lot cheaper.

Sea_Shell

Think of it this way...

Even if they managed to split their finances, would one of them want to sit back and watch the other be moved into LA care, if they had the funds, but the others had run out?

It may otherwise involve them having to move home, or area and the non resident would probably be encouraged to pay "top up" fees for a better room etc.

Albermarle

They can gift a certain amount each year, i'm not sure if its £3000 and you can do this for a prvious year too i think? If the careneeds are a few years away try to get them to spend more. 
  There is something called deprivation of assets where if youre obviously getting rid of more money than usual it can be investigated but some areas councils are more forgiving i think.

There is often confusion about gifts between the inheritance tax rules and the deprivation of assets issue .

For IHT there are some very clear rules ( such as allowing gifts of £3K pa ) but as far as I know there are no specific rules around deprivation of assets and each council will take their own view on each situation.

I am not sure about some councils being more forgiving , if so probably less than they used to be as they are strapped for cash , especially in the social care sector . What is more likely is that some council social care accounts offices will be run more efficiently than others . Also due to stretched resources they probably do not have the time to investigate every case.

One problem can be they might investigate at a later stage and surviving members of the family  , might suddenly find themselves with a large unexpected bill. 

P933alilli

This is a more up-to-date Age UK factsheet from august this year!  There is a section on  mandatory disregard of property if your parents own their own home!   The authority can give discretionary disregard of property in special circumstances! 
https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_property_and_paying_for_residential_care_fcs.pdf

Mojisola

Albermarle said:

If they own their own home , this will be valued as an asset , so even if the savings were reduced by some method , they would still have to pay anyway . The only difference is that payment would be delayed until the house was eventually sold at a later date.

If one goes into residential care and the other stays in the family home, the value of the house is not taken into account for the financial assessment.

Albermarle

Mojisola said:

Albermarle said:

If they own their own home , this will be valued as an asset , so even if the savings were reduced by some method , they would still have to pay anyway . The only difference is that payment would be delayed until the house was eventually sold at a later date.

If one goes into residential care and the other stays in the family home, the value of the house is not taken into account for the financial assessment.

Yes you are right , my mistake. Of course if one dies or moves out for some reason , and the remaining one goes into a care home then it will be counted .

Mojisola

Collyflower1 said:

You need to start planning asap and as it stands I think you have to get below a £23,250 threshold so you need to get rid of £66,750.

If the careneeds are a few years away try to get them to spend more.

I can't understand why people would deliberately spend so much money on non-essentials just to make sure the local taxpayers cover their care costs (if care is ever needed).

I was very relieved that Dad had enough money to pay for residential care which meant we could chose a place that was right for him.

Another elderly relative has a live-in carer plus daily visits from another team - there's no way that would be funded by the council.

jamesd

One traditional use for savings is to provide for a rainy day. Needing care is such a rainy day.