Deprivation of assets ?

Baldytyke88

Mgman1965 said:

Idea has been mooted by OH we both sell, combine money  and buy house with annex for MIL.

My concern is MIL is not in good health and where would we stand if had to go into residential care ?

It sounds like you want to do this to look after MIL, not to deprive of assets. So long as MIL is looked after at home for some time, you could be saving care costs.

Herzlos

I think if the MIL isn't imminently about to go into care, then it's a reasonable approach to give her home care first.

Just document everything and be prepared to fight with / pay the local council if MIL needs to go into residential care sooner than you expect.

elsien

You haven’t said who will be looking after her? You, your 0H, both of you?
Don’t underestimate the strain that this can put on relationships as people need more and more help. Particularly if mental health deteriorates as well, or dementia starts to kick in. Who will support her when you were on holiday for example?

It’s doable. it can be very difficult. I couldn’t look after my mother. I love her dearly but we do clash. We lived together for awhile when she was house hunting. Never again. And I’m sure she would say the same about me.

FlorayG

Some friends of mine did similar. Mother lived in the annexe literally just across a courtyard for a few years. The sale of both their properties however left her with a substantial cash amount in the bank so when she finally DID have to go into care there was enough there to pay for a really nice care home for a year. My friends were prepared to argue that they had looked after her for several years prior and thus saved the council money, but in the end she didn't survive that year. So you could look into buying without spending the whole of the value of both properties?
Since she died they have 'done up' the annexe and make a nice income from holiday lets for it, so also look carefully at the area in which you will buy if that could be a possibility for you later on

Mgman1965

Update.

MIL is very savvy and canny (always has been).She bought her council house many years ago at a huge discount, mortage free from an inheritance, saying then it was a no- brainer for both property values and the savings on rent.

MIL is of the generation that you save (and have to leave an inheritance) not spend

Anyway, she's decided. 

Combining assets is to complicated and can be problematic tax wise and DOE.

Equity release is a "Con" and akin to "giving a large part of your house away" with the fees and interest charged. 

Now she's looking into selling her house (about 300k), buying the smallest, cheapest flat (with low charges) near to us she can find.

Keep the maximum in cash savings allowed in the bank by the LA for asset purposes. 

And "invest" the rest in (her words) "non traceable assets" such as  Gold, platinum rings  that can be kept at home or in a safety deposit box, Medium to High-end jewellery even watches, items that can be claimed as "personal items" not Assets and be forced to sell or be taken as DOA for buying and "later, cough cough") sold on or kept.

Honestly, this woman has to much time, an I-Pad and a crafty brain (she should be a Mafia financial advisor 😃). 

elsien

Non-traceable assets? Good luck with that. Unless she's getting her house sale money in cash, it's going to be obvious that large sums have gone awol over time if there is a higher level of scrutiny.   Local authorities are not stupid and will have seem some of these tricks before. 

Aside from that and more importantly, would she not want the option of paying for better quality of care if needed (bearing in mind that it may not be)? The local authority rate does not always allow for a great quality of life. And would you as her family prefer that she has a better quality of life if it comes to it, or a worse quality of life so that you can inherit?
I know this is her decision and has come from her not from you,  but this is what I've said to my mother. You are more important than any money you may or may not be leaving behind. 

Olinda99

That will not work - if the LA are suspicious and decide to do an investigation they can look at the land registry and see what the house sold for and what her flat cost and and they will ask her what happened to tje difference - they can do the sums themselves

Apart from that, if she is applying for means tested benefits then she will have to do a declaration of everything she has done including buying rings and gold and if she lies then that is a criminal offence.

They have seen it all before !

That aside, buying rings etc is a sure way to lose money unless you are talking about the antique trade which requires specialist knowledge

 Gold bars should be okay but obviously gold is very high at the moment and could easily crash

Mgman1965

Olinda99 said:

That will not work - if the LA are suspicious and decide to do an investigation they can look at the land registry and see what the house sold for and what her flat cost and and they will ask her what happened to tje difference - they can do the sums themselves

Apart from that, if she is applying for means tested benefits then she will have to do a declaration of everything she has done including buying rings and gold and if she lies then that is a criminal offence.

They have seen it all before !

That aside, buying rings etc is a sure way to lose money unless you are talking about the antique trade which requires specialist knowledge

 Gold bars should be okay but obviously gold is very high at the moment and could easily crash

Query from me on this.

Surely though, say buying a ring, be it £100 or £5,000 is a personal purchase for yourself, your not giving it away/wasting it and if she wants to pay for extra care can sell it.

It's not like her selling her 300k house to me for £1.

Surely a LA cannot dictate what you buy yourself and for how much in your old age if you downsize your home ?

elsien

Mgman1965 said:

Olinda99 said:

That will not work - if the LA are suspicious and decide to do an investigation they can look at the land registry and see what the house sold for and what her flat cost and and they will ask her what happened to tje difference - they can do the sums themselves

Apart from that, if she is applying for means tested benefits then she will have to do a declaration of everything she has done including buying rings and gold and if she lies then that is a criminal offence.

They have seen it all before !

That aside, buying rings etc is a sure way to lose money unless you are talking about the antique trade which requires specialist knowledge

 Gold bars should be okay but obviously gold is very high at the moment and could easily crash

Query from me on this.

Surely though, say buying a ring, be it £100 or £5,000 is a personal purchase for yourself, your not giving it away/wasting it and if she wants to pay for extra care can sell it.

It's not like her selling her 300k house to me for £1.

Surely a LA cannot dictate what you buy yourself and for how much in your old age if you downsize your home ?

The implication from the earlier post was that she was going to try to hide the purchases or claim they are all personal possessions and remove them from assessment that way. And it's not just about wanting to pay for extra care; sometimes it is about needing to. 

The local authority can ask about the timing of purchases and what the reasoning was, when looking at possible DDoA. Someone in their eighties who has previously never shown any interest in gold bullion or expensive rolexes and suddenly has a safe full of them? It's a reasonable presumption that they have done this to avoid care costs because that is indeed specifically the reason that these have been bought. 
No they absolutely can't dictate what you buy. But they can include those assets in the financial assessment where there is valid reason to do so, whether "personal possessions" or not. 

Albermarle

OP - It is worth noting that the likelihood of someone losing all their assets, including their home due to care fees, is less than most people think.
Only a small % of people end up in a care home, and many die there before many assets are spent.
Even for people in their eighties in not so good health, will more likely than not never go into a care home.
Of course losing your home can and does happen, but not as frequently as people think. So this should also be taken into account when making plans.