Complicated Equity Release

MWT

Just to put some numbers on this, if it is possible to use a deed of variation to alter the distribution of the mother's estate to leave her share of the property to the father, and if he was then able to get ER with 50% inheritance protection on the property with a valuation of say £1m then it would be possible to release somewhere around £240k if the father is over 85, less if younger (although medical factors can be used to reduce the impact of a younger age).

It just helps frame the potential sums likely to be available, and with the cost of in-home carers as high as it can be, it gives a clue as to the practicality of there being enough funds over and above care needs to even consider distributions to the siblings.

If the house value is only £500k then the ER could be around £120k perhaps...

Anything more complex than this very simple route is going to increase costs and further limit the amount actually available to fund the care...

The other, and obviously less desirable alternative, is to simply sell the property and use his share of the proceeds to fund residential care, no complex legal or financial hoops to jump through, and depending upon costs and the degree of home care required (typically residential is lower than 24/7 home care) this may provide the longest period of care cover for him... but I know this is not a simple decision... even though it would release a lot more cash to cover his care...

ACG

It amazes me people trying to avoid care home fees. 

My gran is in one. We went to 3 homes, 2 of them were council run and I dont think I would have put a dog in them. The third costs £1,400 a week! But its her money, her and my grandad earned that so she deserves every penny of it being spent on keeping her comfortable in her final years. 

BigAshB

ACG said:

It amazes me people trying to avoid care home fees. 

My gran is in one. We went to 3 homes, 2 of them were council run and I dont think I would have put a dog in them. The third costs £1,400 a week! But its her money, her and my grandad earned that so she deserves every penny of it being spent on keeping her comfortable in her final years. 

It's not about avoiding care home fees at all. The live-in carer allows my dad to remain in his own home, with all his own stuff and independence. He goes shopping on a scooter and goes to various social clubs 2-3 times per week, but he can't cook, clean or dress himself due to his disability. Care homes severely limit the number of possessions you can bring with you and, to an extent (varies from home to home), limits independence. My father is currently in a grey area between being suitable for supported independent living and requiring the services of a care home.
For now, the live-in carer is a perfect compromise and happens to cost half as much as a reasonable care home, but the cost is not a motivating factor. Dad's happiness is.
Through my work, I have seen good and bad care homes and even used the same phrase as you about not putting a dog in them.

MWT

BigAshB said:

ACG said:

It amazes me people trying to avoid care home fees. 

My gran is in one. We went to 3 homes, 2 of them were council run and I dont think I would have put a dog in them. The third costs £1,400 a week! But its her money, her and my grandad earned that so she deserves every penny of it being spent on keeping her comfortable in her final years. 

It's not about avoiding care home fees at all.

Understood, and I wasn't suggesting that was in your mind at all, nor I think was ACG, but it is one of the reasons that people like your parents were sometimes directed down the path of 'joint tenants' as it offered a way to 'protect' their ability to leave an inheritance for the next generation, it just wasn't always explained how it can impact on the care provision for the surviving partner.

I do hope you can find a path through this to get the funds you need to keep him in his home, it is just going to take some careful navigation...

ACG

BigAshB said:

ACG said:

It amazes me people trying to avoid care home fees. 

My gran is in one. We went to 3 homes, 2 of them were council run and I dont think I would have put a dog in them. The third costs £1,400 a week! But its her money, her and my grandad earned that so she deserves every penny of it being spent on keeping her comfortable in her final years. 

It's not about avoiding care home fees at all. The live-in carer allows my dad to remain in his own home, with all his own stuff and independence. He goes shopping on a scooter and goes to various social clubs 2-3 times per week, but he can't cook, clean or dress himself due to his disability. Care homes severely limit the number of possessions you can bring with you and, to an extent (varies from home to home), limits independence. My father is currently in a grey area between being suitable for supported independent living and requiring the services of a care home.
For now, the live-in carer is a perfect compromise and happens to cost half as much as a reasonable care home, but the cost is not a motivating factor. Dad's happiness is.
Through my work, I have seen good and bad care homes and even used the same phrase as you about not putting a dog in them.

I was talking to MWT with my comment. It was not a dig at you or anyone else. 

I was saying that I think it is a false economy trying to avoid care home fees as its likely the parents suffer with worse care - my grans is like a hotel with full english breakfasts! I noted your dad had a live in carer which I agree if possible that is by far the better option. 

Snuggles

BigAshB said:

ACG said:

It amazes me people trying to avoid care home fees. 

My gran is in one. We went to 3 homes, 2 of them were council run and I dont think I would have put a dog in them. The third costs £1,400 a week! But its her money, her and my grandad earned that so she deserves every penny of it being spent on keeping her comfortable in her final years. 

It's not about avoiding care home fees at all. The live-in carer allows my dad to remain in his own home, with all his own stuff and independence. He goes shopping on a scooter and goes to various social clubs 2-3 times per week, but he can't cook, clean or dress himself due to his disability. Care homes severely limit the number of possessions you can bring with you and, to an extent (varies from home to home), limits independence. My father is currently in a grey area between being suitable for supported independent living and requiring the services of a care home.
For now, the live-in carer is a perfect compromise and happens to cost half as much as a reasonable care home, but the cost is not a motivating factor. Dad's happiness is.
Through my work, I have seen good and bad care homes and even used the same phrase as you about not putting a dog in them.

You say it's not about avoiding care home fees, but isn't that why your mother left her share to you and a sibling instead of it going to your father? If I was in your position and money was needed to pay for care costs, I'd be gifting it back to the father so he then has the resources needed to pay for his care.

MWT

Snuggles said:

You say it's not about avoiding care home fees, but isn't that why your mother left her share to you and a sibling instead of it going to your father? If I was in your position and money was needed to pay for care costs, I'd be gifting it back to the father so he then has the resources needed to pay for his care.

There are other reasons such as IHT planning (perhaps misguided) and many family matters that can lead people to this sort of arrangement, and it is something the parents would have discussed and decided upon without the children necessarily even being aware of it until now.

Advice motivated by fear of care fees is certainly one possibility though for the parents decision. Here is a typical example... https://www.winstonsolicitors.co.uk/protecting-assests-from-care-home-fees.html

Once it has happened it is not simple to just give it back unless a deed of variation is still possible, as there will be IHT and CGT matters to resolve which depending on property value could make the process expensive...