Care home fees and property rent

Gizmono1

Hi, My mother in law went into care due to dementia 18 months ago, whilst she had capacity circa 23 months ago she gifted me £100k  to her grandchildren when she passes for them to help buy a house
My intention is to use this money to buy a property and use a further 40k from her savings (we have POA) all the money from rental income will go straight to paying the fees.
this will ensure she can have care for the next 10 years if needed
We receive universal credit (joint) and my wife is in receipt of PIP for disability which is why I only work part time. our savings are below 2k
One idea to avoid further tax I have been told is to register my wife as a sole trader as she has no earning. My query is will she lose her universal credit? or is there any further implications?  Any ideas?

unforeseen

Isn't the £100k part of your savings as well? 

poppy12345

Gizmono1 said:

Hi, My mother in law went into care due to dementia 18 months ago, whilst she had capacity circa 23 months ago she gifted me £100k  to her grandchildren when she passes for them to help buy a house
My intention is to use this money to buy a property and use a further 40k from her savings (we have POA) all the money from rental income will go straight to paying the fees.
this will ensure she can have care for the next 10 years if needed
We receive universal credit (joint) and my wife is in receipt of PIP for disability which is why I only work part time. our savings are below 2k
One idea to avoid further tax I have been told is to register my wife as a sole trader as she has no earning. My query is will she lose her universal credit? or is there any further implications?  Any ideas?

She gifted £100k to you for her grandchildren for them to buy a house when she passes but you're going to use it to buy a property and rent it out to pay her fees? Something doesn't seem right to me here. Is the 100k in your name?

HillStreetBlues

Gizmono1 said:

Hi, My mother in law went into care due to dementia 18 months ago, whilst she had capacity circa 23 months ago she gifted me £100k  to her grandchildren when she passes for them to help buy a house
My intention is to use this money to buy a property and use a further 40k from her savings (we have POA) all the money from rental income will go straight to paying the fees.
this will ensure she can have care for the next 10 years if needed
We receive universal credit (joint) and my wife is in receipt of PIP for disability which is why I only work part time. our savings are below 2k
One idea to avoid further tax I have been told is to register my wife as a sole trader as she has no earning. My query is will she lose her universal credit? or is there any further implications?  Any ideas?

I see a couple of issues
A £100k "gift"  not that long before going onto care of because of dementia might be looked at if someone used the POA to do it.
If she "gift" you £100k  then that money would needed to have been declared and a Decision Maker decide if to stop UC.

Keep_pedalling

How much does this gift leave her with to pay care fees? 

As for the additional £40k this is way beyond your authority as har attorney regardless of the level of her savings.

Brie

Deprivation of assets so you'll have to pay back the £100k.  And if you don't benefit fraud for claiming when you have a massive amount of money in your account.

BUT if MiL said "Giz, do me a favour.  When I die makesure the kids each get a share of the lump of cash in my savings account to put towards buying themselves a nice home."  In which case the money is still in her account and you can use the POA to pay it towards her fees.   

Jyana

Duplicate topic here, with a few more details in. Looks like the £100k maybe was in the grandchildren's name originally, but not confirmed. Nevertheless, if you have invested it yourself instead, and hold the house/run it as a business/don't live in it, it will still end your joint UC claim as a couple as you will be over the threshold still. 

turnitround

According to your other thread you have bought the house at auction and intend to put it in your wife's name. Presumably this is why you now say you have less than 2k in savings.

Anything done by anyone with POA is supposed to benefit the person they hold POA for.

Where has the money been sitting between the time she gifted it and the time you bought the house? It should have been declared because of you claiming benefits.

sheramber

If the house is in your wife's name or your name or joint it needs to be reported to UC and will count as capital so UC will stop,

TELLIT01

I would strongly advise getting legal advice before doing anything with the money.  If the money is actually in the grandchildren's name with the OP have power of attorney over the funds, purchasing anything and putting it in their own name would seem potentially problematic.  As they are on UC, that property would possibly be classed as theirs and stop UC entitlement.

elsien

As her power-of-attorney you have to act in her best interests. 

Throwing another 40 K at a property which may or may not be in her name with all the implications of people not paying rent and racking up large costs is very questionable. And hard to see how it would ever be in her best interests when there are far safer options. Unless she was previously a property speculator and landlady with a proven record of making those decisions when she had capacity.

You are heading towards an OPG investigation and having the power-of-attorney removed, unless you are very careful. 

Plus the potential of investigation for benefit fraud, if some of the other information from another posters is correct.