My Mum’s Care home fees

AlisonDee

Hello everyone, I’m a newbie to this forum and to be honest forums in general. So I’ll cut to the chase. 

I need to pay for mums monthly care home fees and am at a loss how best to  proceed to raise the funds. 

The situation:- Mum bought a bungalow with proceeds of sale of her home half of which was left to me by my dad (I’m an only child. The bungalow was put in my name. The council will now only defer payment if her name is back on the land registry documents.(Not sure if deferral is a good option) 

I do not want to sell the property as it’s providing a home for my daughter and partner.  They are paying rent which is going towards mums fees. However there is a shortfall. 

Has anyone got any suggestions on the best way to raise funds to satisfy the shortfall. 

Thanks in advance. 

sourcrates

Deferred payment is the usual choice, but in order for that to work, the house must be in your Mums name, so a charge can be placed on the property, without that charge the debt could not be secured.

Repayment of that debt would normally be by sale of the house on death of the client, but as you don`t want to do that, the money has to come from elsewhere.

This is something you will have to budget for from your own income if you want to pursue this path, either that or increase the rent the daughter pays.

Grumpy_chap

AlisonDee said:

Hello everyone, I’m a newbie to this forum and to be honest forums in general. So I’ll cut to the chase. 

I need to pay for mums monthly care home fees and am at a loss how best to  proceed to raise the funds. 

The situation:- Mum bought a bungalow with proceeds of sale of her home half of which was left to me by my dad (I’m an only child. The bungalow was put in my name. The council will now only defer payment if her name is back on the land registry documents.(Not sure if deferral is a good option) 

I do not want to sell the property as it’s providing a home for my daughter and partner.  They are paying rent which is going towards mums fees. However there is a shortfall. 

Has anyone got any suggestions on the best way to raise funds to satisfy the shortfall. 

Thanks in advance. 

I think this needs to wind back in time to understand the full situation so that there can be a better understanding as to whether the Local Authority have any claim to pursue the charge against the property.

As I understand it:

1. Mum and Dad owned the family home together.
2. Was that home owned as "Tenants-in-Common" or "Joint Tenants"?  This is important as it influences what happens on the death of the first partner.
3. Dad passed and the OP states that Dad's half of the family home was left to the OP.  Let's assume, therefore, the property was "Tenants-in-Common" as that is the process that allows Dad to leave his 50% as he wishes.
4. The family home is now 50% Mum and 50% OP.
5. The family home was then sold, raising £cash.
6. Mum gifted her £cash to OP
7. The £cash was used to buy a bungalow.  Did all the £cash get used up in buying the bungalow?
8. The bungalow was registered in the OP's name only (never Mum's in part).
9. Did OP ever live in the bungalow?
10. Mum lived in the bungalow until she became unable to live in the bungalow and moved to a care home.
11. Did Mum pay rent to OP to live in the bungalow?
12. OP's daughter and partner now live in the bungalow and pay rent to OP.
13. OP gifts the rent each month to Mum to help pay care home fees.

Is that, broadly, the sequence of events?
Can the OP add timelines to any of the events?

Why did things happen like this?
Particularly, all the "giving" that seems to be going on?
Very specifically item 6 - Mum gifting her £cash from sale of the family home to the OP?

This is key, as the reasons behind this will influence whether "Gifts with Reservation" (GWR) comes into play in the case of IHT issues and whether "Deprivation of Assets" (DoA) comes into play in the case of funding care.

The OP states
"The council will now only defer payment if her name is back on the land registry documents"
Which is interesting, as the sequence of events as it appears to have happened, Mum's name was never on the land registry documents for the bungalow so it cannot go back on the land registry documents.

There are other factors that will come into consideration in all of this, but cannot be commented in detail at this stage:

• Income tax arising from the rent received from OP's daughter and partner
• Impact to any means-tested benefits claim by the OP (may not be relevant)
• CGT if the OP now transfers 50% of the bungalow to Mum.  Possible SDLT also.

lordmountararat

This situation seems to be complex with the potential for all sorts of tax and other  implications, and if I was in this position I would seek professional advice from a appropriately qualified solicitor or accountant.