Making the most of house sale capital to pay care home fees

handyandy1

JamesRobinson48 said:

handyandy1 said:

Long story short - 94yr old Father unable to cope at home following the loss of his wife. He is in reasonable physical health for his age but showing signs of dementia. We have found a lovely care home where he is very happy but inevitably it needs to be funded by the capital from the sale of his house which we fully accept. The sale completed last week and I (as an attorney) am now in possession of a cheque equivalent to the average price of a three bed property in Sussex. Now I see this as time rather than money and I want to give him the most time with the funds available.  I need to drip feed 6k per month to the care home so I will need easy access to a proportion of the funds but how do I make the most of the remainder? Should I see a financial advisor or the bank manager or are there any no-risk schemes that are aimed at this situation? 
I would welcome any input from anyone who has experience of a similar situation….

A cheque?  Are you serious?  Why wasn't the money paid electronically on completion day, by your conveyancing solicitor, into Father's bank current account?

There would be a charge of £75 for the electronic transfer, I can walk to the bank and deposit in his account for no charge!!

handyandy1

Grumpy_chap said:

handyandy1 said:

94yr old Father unable to cope at home signs of dementia.
cheque equivalent to the average price of a three bed property in Sussex.
6k per month to the care home

IMO, a simple solution is going to be best here.

I don't know why the cagey indication of capital available - is this "three bed property in Sussex" a >£million Brighton seafront pent-house or a dilapidated <£50k park home in Hastings?
This makes a big difference to how the capital should be managed.

Anyway, £6k per month so £72k per year.
I don't wish to be insensitive, but how many years do you realistically think he has?
If there is £500k from the house sale, that is likely to see him out in all probability and a simple interest bearing but easy access account would likely be the best approach.

It's 320k if that helps, so about 4 years worth of funding at the current rate but we are expecting annual inflation increases and his care needs are likely to get more complex and expensive in that period. His mother reached 100 and he has a 98yr old brother.

xylophone

You have LPA so presumably you have registered this on all your father's accounts.

I am somewhat surprised that you have a cheque for the proceeds - one would have expected the money to be electronically transferred into your father's current account - presumably he has one for the payment of his pension(s) etc?

If he can no longer care for himself, have you applied for Attendance Allowance on his behalf?

Does the home provide Nursing Care?

https://www.moneyhelper.org.uk/en/family-and-care/long-term-care/nhs-nursing-care-contribution#:~:text=It's paid to the care,might still be better off.

If your father's current account offers no interest on money in the account, you might wish to consider one that does.

You should be able to open such an account in his name as his Attorney.

In the days when my relative had PoA, he opened a current account in the name of the donor with Santander and changed her charity DDs from her  existing current account to the 123 account then available.

In those days, Santander paid 3% on up to £20,000 - her care fees were paid from this account which was topped up from the current account to which her pensions/dividends were paid.

She was entitled to the usual ISA allowance (which had always been utilised) and this continued to be utilised after she entered care at the age of 91.

Other savings accounts (fixed rate and other) were also opened in her name and managed by my relative as Attorney.

Remember that the home you have chosen may not always be suitable.

My relative's donor went from a home for the elderly (when she  had full capacity and was mobile with walking sticks/zimmer frame), to a care home as she became less mobile/needed far for help with personal care) and finally as she lost capacity to a Nursing Home where she died at the age of 97.

Looking back on it, it would have been better to choose a home which had full facilities for all classes of resident from the start - there would have been less upheaval.

xylophone

Incidentally, don't forget your father's tax affairs - is he in self assessment already?

If not, he will need to be if interest on non ISA savings is £10,000 or more per annum. 

badmemory

Back when I did this for my mother there were 6 months fixed rates, so I had 6 months in instant access, 6 months in a 6 month account, 6 months in a 12 month account & 6 months in an 18 month account.  The rest in the best I could get.  The left overs in each 6 month period caused by unused income went into at least 2 year accounts.  The thing that nearly caught me out was being used to monthly payments, as I hadn't taken my state pension then, was the fact that almost everything was 4 weekly including the care home.  Which meant a lot of stuff had to be done manually.

I assume he is on full attendance allowance.  The care home manager told me that almost everyone in a care home should be on the highest rate.

dealyboy

Hi Andy (OP) and I'm sorry for your and your father's loss  . 

I think an IFA might be advisable ... there are one or two around here ... because not only are you looking to fund the home for an indefinite period but looking to protect your father's estate for when the time comes. 

Keep_pedalling

handyandy1 said:

Grumpy_chap said:

handyandy1 said:

94yr old Father unable to cope at home signs of dementia.
cheque equivalent to the average price of a three bed property in Sussex.
6k per month to the care home

IMO, a simple solution is going to be best here.

I don't know why the cagey indication of capital available - is this "three bed property in Sussex" a >£million Brighton seafront pent-house or a dilapidated <£50k park home in Hastings?
This makes a big difference to how the capital should be managed.

Anyway, £6k per month so £72k per year.
I don't wish to be insensitive, but how many years do you realistically think he has?
If there is £500k from the house sale, that is likely to see him out in all probability and a simple interest bearing but easy access account would likely be the best approach.

It's 320k if that helps, so about 4 years worth of funding at the current rate but we are expecting annual inflation increases and his care needs are likely to get more complex and expensive in that period. His mother reached 100 and he has a 98yr old brother.

Does that take account of pension income as well?

Are you claiming attendance allowance for him? It should be available while he is self funding.

handyandy1

xylophone said:

You have LPA so presumably you have registered this on all your father's accounts.

I am somewhat surprised that you have a cheque for the proceeds - one would have expected the money to be electronically transferred into your father's current account - presumably he has one for the payment of his pension(s) etc?

If he can no longer care for himself, have you applied for Attendance Allowance on his behalf?

Does the home provide Nursing Care?

https://www.moneyhelper.org.uk/en/family-and-care/long-term-care/nhs-nursing-care-contribution#:~:text=It's paid to the care,might still be better off.

If your father's current account offers no interest on money in the account, you might wish to consider one that does.

You should be able to open such an account in his name as his Attorney.

In the days when my relative had PoA, he opened a current account in the name of the donor with Santander and changed her charity DDs from her  existing current account to the 123 account then available.

In those days, Santander paid 3% on up to £20,000 - her care fees were paid from this account which was topped up from the current account to which her pensions/dividends were paid.

She was entitled to the usual ISA allowance (which had always been utilised) and this continued to be utilised after she entered care at the age of 91.

Other savings accounts (fixed rate and other) were also opened in her name and managed by my relative as Attorney.

Remember that the home you have chosen may not always be suitable.

My relative's donor went from a home for the elderly (when she  had full capacity and was mobile with walking sticks/zimmer frame), to a care home as she became less mobile/needed far for help with personal care) and finally as she lost capacity to a Nursing Home where she died at the age of 97.

Looking back on it, it would have been better to choose a home which had full facilities for all classes of resident from the start - there would have been less upheaval.

As I mentioned in another reply, the solicitors charge £75 to transfer the funds electronically, that would pay for an escort to enable him to participate in a couple of organised outings that the care home provide. The care home does provide nursing care, a factor we considered when choosing, as having to re-house somebody who requires that level of care is likely to be traumatic.
He does have a current account that his pension is payed into and I will be depositing the cheque into that first thing in the morning.
Thanks for the help!

handyandy1

badmemory said:

Back when I did this for my mother there were 6 months fixed rates, so I had 6 months in instant access, 6 months in a 6 month account, 6 months in a 12 month account & 6 months in an 18 month account.  The rest in the best I could get.  The left overs in each 6 month period caused by unused income went into at least 2 year accounts.  The thing that nearly caught me out was being used to monthly payments, as I hadn't taken my state pension then, was the fact that almost everything was 4 weekly including the care home.  Which meant a lot of stuff had to be done manually.

I assume he is on full attendance allowance.  The care home manager told me that almost everyone in a care home should be on the highest rate.

Thanks for the that, the application for Attendance Allowance has been sent off and we are awaiting the outcome....

handyandy1

Keep_pedalling said:

handyandy1 said:

Grumpy_chap said:

handyandy1 said:

94yr old Father unable to cope at home signs of dementia.
cheque equivalent to the average price of a three bed property in Sussex.
6k per month to the care home

IMO, a simple solution is going to be best here.

I don't know why the cagey indication of capital available - is this "three bed property in Sussex" a >£million Brighton seafront pent-house or a dilapidated <£50k park home in Hastings?
This makes a big difference to how the capital should be managed.

Anyway, £6k per month so £72k per year.
I don't wish to be insensitive, but how many years do you realistically think he has?
If there is £500k from the house sale, that is likely to see him out in all probability and a simple interest bearing but easy access account would likely be the best approach.

It's 320k if that helps, so about 4 years worth of funding at the current rate but we are expecting annual inflation increases and his care needs are likely to get more complex and expensive in that period. His mother reached 100 and he has a 98yr old brother.

Does that take account of pension income as well?

Are you claiming attendance allowance for him? It should be available while he is self funding.

No, the pension is in addition to that. With all the house selling shenanigans and working full time, I haven't given a thought to tax implications.....