Is home considered an asset in this case?

SnowWhiterThanWhite

Hi all

I'm trying to help my friend who has some (hypothetical at this moment) questions around her mums finances.
Mum owns her own property in own name only, in in receipt of Attendance Allowance and Pension Credit.

Mum lives with a 'companion '. They have lived together 30+ years in the same property. 

Their finances have always remained separate, the companion contributes towards expenses but ALL bills Inc Council tax in mums name only.
Companion has savings around 50K in their sole name. No joint accounts held.
Mum has always said that should she die, her companion can remain in the property until their death,  both children are happy with this. Both mums children hold LPOA for mum AND companion. 

Mum currently has NO social care needs but is becoming frail, hence the hypothetical question.

IF mum ended up in Res Care in the future, would her property be taken into account?
Not sure how the LA would view the relationship with the 'companion '?

I have suggested that they seek legal advice and consider putting the companion onto the house deeds PRIOR to any social care input, does anyone have any thoughts on the correct way to handle this situation?

elsien

By companion, do you mean partner?
Because a partner living in the home would mean it was it was disregarded. 

If this is a different type of relationship, then the situation is less clear cut so you need to avoid euphemisms and actually say what the relationship is.

With regards to putting the other person on the deeds, aside from potential deliberate deprivation of asset queries, then it also raises inheritance questions. 

They will own part of all of the house depending on whether they are joint tenants or tenants in common.
Mum clearly didn’t  intend the property to go to them in the long-term if they just have a life interest now so how does giving them ownership of the house fit with how she was planning to leave her assets otherwise?

Emmia

Does your mum have a will? Drafted to give the companion a life interest in terms of living in the property which would then go to her children if the companion moved out, or died.

But if the companion is essentially a lodger, rather than a life partner then they'd be expected to move out if your mum needed care, and doesn't have the liquid assets to pay for it without selling the house.

The nature of the relationship matters.

Keep_pedalling

She could provide her ‘companion’ with a life interest in her will but as they are not a spouse or civil partner this could impact her estate’s IHT liability.

Is this purely a platonic relationship? If not then marriage or civil partnership might be in order. 

rosewalk

Is she claiming Pension Credit as a single person or is this a joint claim? 

Grumpy_chap

SnowWhiterThanWhite said:

Hi all

I'm trying to help my friend who has some (hypothetical at this moment) questions around her mums finances.
Mum owns her own property in own name only, in in receipt of Attendance Allowance and Pension Credit.

Mum lives with a 'companion '. They have lived together 30+ years in the same property. 

Their finances have always remained separate, the companion contributes towards expenses but ALL bills Inc Council tax in mums name only.
Companion has savings around 50K in their sole name. No joint accounts held.
Mum has always said that should she die, her companion can remain in the property until their death,  both children are happy with this. Both mums children hold LPOA for mum AND companion. 

Mum currently has NO social care needs but is becoming frail, hence the hypothetical question.

IF mum ended up in Res Care in the future, would her property be taken into account?
Not sure how the LA would view the relationship with the 'companion '?

I have suggested that they seek legal advice and consider putting the companion onto the house deeds PRIOR to any social care input, does anyone have any thoughts on the correct way to handle this situation?

What is the relationship between Mum and the "companion"?  It makes a difference in these issues.

Has Mum written a Will to allow the "companion" to remain in the home?  It makes no difference what Mum has always said.  If it is not in a Will then the terms of any Will (or intestacy if no Will) will prevail.

If the house is now put into shared names, that may look like deprivation of assets.  It will definitely have an impact as to what is left to whom when Mum passes.  Mum's Estate will be smaller by the half of the house that was gifted,

SnowWhiterThanWhite

Emmia said:

Does your mum have a will? Drafted to give the companion a life interest in terms of living in the property which would then go to her children if the companion moved out, or died.

But if the companion is essentially a lodger, rather than a life partner then they'd be expected to move out if your mum needed care, and doesn't have the liquid assets to pay for it without selling the house.

The nature of the relationship matters.

The Will leaves everything to her 2 children.

SnowWhiterThanWhite

Keep_pedalling said:

She could provide her ‘companion’ with a life interest in her will but as they are not a spouse or civil partner this could impact her estate’s IHT liability.

Is this purely a platonic relationship? If not then marriage or civil partnership might be in order. 

Difficult one, I believe it was a romantic partnership at the beginning but more of a  companionship in later years. The property would be valued around 190k

SnowWhiterThanWhite

rosewalk said:

Is she claiming Pension Credit as a single person or is this a joint claim? 

Single person

SnowWhiterThanWhite

Grumpy_chap said:

SnowWhiterThanWhite said:

Hi all

I'm trying to help my friend who has some (hypothetical at this moment) questions around her mums finances.
Mum owns her own property in own name only, in in receipt of Attendance Allowance and Pension Credit.

Mum lives with a 'companion '. They have lived together 30+ years in the same property. 

Their finances have always remained separate, the companion contributes towards expenses but ALL bills Inc Council tax in mums name only.
Companion has savings around 50K in their sole name. No joint accounts held.
Mum has always said that should she die, her companion can remain in the property until their death,  both children are happy with this. Both mums children hold LPOA for mum AND companion. 

Mum currently has NO social care needs but is becoming frail, hence the hypothetical question.

IF mum ended up in Res Care in the future, would her property be taken into account?
Not sure how the LA would view the relationship with the 'companion '?

I have suggested that they seek legal advice and consider putting the companion onto the house deeds PRIOR to any social care input, does anyone have any thoughts on the correct way to handle this situation?

What is the relationship between Mum and the "companion"?  It makes a difference in these issues.

Has Mum written a Will to allow the "companion" to remain in the home?  It makes no difference what Mum has always said.  If it is not in a Will then the terms of any Will (or intestacy if no Will) will prevail.

If the house is now put into shared names, that may look like deprivation of assets.  It will definitely have an impact as to what is left to whom when Mum passes.  Mum's Estate will be smaller by the half of the house that was gifted,

The children are happy for the companion to remain in the house. Would DofA apply even though there is currently no care needs?

elsien

There isn’t a definitive answer to that one.

The local authority would have to show that there was an intention to avoid care home needs in the future because even if the person doesn’t have care needs now if they’re old Lee and frail and with failing health, it’s reasonably foreseeable that care will be needed.

In this case, the intention is twofold in that it’s ensuring that the companion has a home but in order to do that it means that the house has to be put out of the local authorities reach.

It would go to a decisionmaker and it would have to be argued at the time it was needed. 

But claiming as a single person rather than a couple, is not going to go in their favour.