Mother's care

JenNixSofHol

Hi,
My mother is currently in a care home which she is funding from her savings and when they run out she has a house which has been valued at £90,000
I have Power of attorney over her finance and welfare and it's been suggested to me that I should buy her house for £50,000 so that it ceases to be part of her estate and when her savings run out the state should take over the cost of her care.
I said to the person who suggested this that HMRC will come knocking if they find out I underpaid for her house, citing possible fraud, and they said that even if they found out about the sale it would be a genuine sale and nothing could be done.
Any thoughts on this matter would be greatly appreciated

     G

DiamondLil

Sounds like a plan - what could possibly go wrong ?

Search "deprivation of assets" on the forums and you'll find plenty of information on this subject.

Keep_pedalling

If your mother no longer has the mental capacity to make decisions then doing this would be beyond your authority as her attorney so would basically be theft. Under these conditions you have to act in her best interest not your own.

If she still has mental capacity to make this decision then it would be classed as deliberate deprivation of assets so it is still not an option.

As a self funder is she claiming attendance allowance?

Brie

I'm glad you know that your friend is wrong.   Yes the local council would question this.

Linton

JenNixSofHol said:

Hi,
My mother is currently in a care home which she is funding from her savings and when they run out she has a house which has been valued at £90,000
I have Power of attorney over her finance and welfare and it's been suggested to me that I should buy her house for £50,000 so that it ceases to be part of her estate and when her savings run out the state should take over the cost of her care.
I said to the person who suggested this that HMRC will come knocking if they find out I underpaid for her house, citing possible fraud, and they said that even if they found out about the sale it would be a genuine sale and nothing could be done.
Any thoughts on this matter would be greatly appreciated

     G

"The person" is totally wrong.  Never mind care home costs, you using PoA to benefit yourself to the financial detriment of your mother could be fraud. Attorney's have been sent to jail for it.

Secondly the local authority could easily find out what you did, "what happened to Mum's house?" would be an obvious question for investigation.  As I understand it, without court approval LAs cant take money to pay for someone's care, they simply refuse to pay for the care themselves.  What would you do then? Let the current care home evict her?

Finally, do you really want to gain by getting Mother removed from her current home and sent to the cheapest care home a LA can find?  Or would it be better for you to help Mother to use her own money to live her final days in the most comfortable conditions she can afford?

Cobbler_tone

…and yet having a property in Trust seems to be often frowned upon. Always lots of high horses and opinions from people online. In your instance doesn’t sound as there is much you can do but the very best of luck to you and your mum. Never a nice situation to deal with.

Keep_pedalling

Cobbler_tone said:

…and yet having a property in Trust seems to be often frowned upon. Always lots of high horses and opinions from people online. In your instance doesn’t sound as there is much you can do but the very best of luck to you and your mum. Never a nice situation to deal with.

Putting your home in trust is not frowned upon it is just a plain idiotic thing to do. If does not avoid IHT and it is still deliberate deprivation of assets. The only people to benefit from this are the sharks who charge high fees to set up useless trusts. 

Marcon

JenNixSofHol said:

Thank you everybody.
You've all confirmed what I already knew.

Maybe show this thread to the person who came up with these idiotic notions to ensure they don't persuade anyone else to follow their hopelessly wrong 'advice' ?

Marcon

Cobbler_tone said:

…and yet having a property in Trust seems to be often frowned upon. Always lots of high horses and opinions from people online. In your instance doesn’t sound as there is much you can do but the very best of luck to you and your mum. Never a nice situation to deal with.

Frowning isn't the issue - rolling the eyes possibly. Read https://www.radiotimesmoney.com/retirement/hold-onto-your-house/ or https://www.radiotimesmoney.com/retirement/a-question-of-trust/ to see why...

elsien

As above, you are obliged to act in your mother’s best interests, not your own.
How is it in your mother’s best interest for her house to be sold at less than the going rate.

Aside from all the issues mentioned above, if you want your LPA to be revoked this is a good way to be going about it

Cus

Imo the average person out there will likely automatically think how they can hold onto family money/inheritance/house sale etc and hope/expect that someone should pay for family care. I don't think that in itself is wrong or selfish.  However the rules are clear. People on this forum generally do see it as some devious selfish behaviour and jump to their own positions on the subject, including jokey comments.