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  • FIRST POST
    • James Blonde
    • By James Blonde 16th May 19, 7:03 PM
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    James Blonde
    What can my mum do with her money?
    • #1
    • 16th May 19, 7:03 PM
    What can my mum do with her money? 16th May 19 at 7:03 PM
    We live in Scotland. After a number of falls, I'll health and periods in hospital left her unable to cope, and on recommendation by social services and doctors, my mum has just moved into rented (housing association) sheltered accommodation with on site care. Her house sale is due to go through tomorrow which will mean she has savings of around £150k.

    She obviously needs to be able to fund her rent and her care (offset by benefits at her assessed rate) but am I right in saying she can effectively do what she wants with the rest of that money?
Page 1
    • Alter ego
    • By Alter ego 16th May 19, 7:08 PM
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    Alter ego
    • #2
    • 16th May 19, 7:08 PM
    • #2
    • 16th May 19, 7:08 PM
    Don't forget her savings may affect her (means tested) benefits when declared.

    What she did with her money may become pertinent if she requires LA funding for her care.
    Last edited by Alter ego; 16-05-2019 at 7:11 PM.
    Loose means not tight, Lose means something is lost, simples no?
    Ignore me if you like, it's not the real me anyway.
    • James Blonde
    • By James Blonde 16th May 19, 7:41 PM
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    James Blonde
    • #3
    • 16th May 19, 7:41 PM
    • #3
    • 16th May 19, 7:41 PM
    The value of the house was taken into account when she was assessed (cash and assets above £28k I think?) and she does (I'm pretty sure, but not 100%) get some LA funding for her care... Obody has ever mentioned what she can or can't do with her money though
    • getmore4less
    • By getmore4less 16th May 19, 7:46 PM
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    getmore4less
    • #4
    • 16th May 19, 7:46 PM
    • #4
    • 16th May 19, 7:46 PM
    Key is Scotland different to E&W.
    • Alter ego
    • By Alter ego 16th May 19, 7:47 PM
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    Alter ego
    • #5
    • 16th May 19, 7:47 PM
    • #5
    • 16th May 19, 7:47 PM
    Google - deprivation of assets.

    I have no idea about Scottish law etc.
    Loose means not tight, Lose means something is lost, simples no?
    Ignore me if you like, it's not the real me anyway.
    • James Blonde
    • By James Blonde 16th May 19, 8:39 PM
    • 41 Posts
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    James Blonde
    • #6
    • 16th May 19, 8:39 PM
    • #6
    • 16th May 19, 8:39 PM
    Yeh, I did suspect Scotland being different might limit my responses a bit and am aware rules in England & Wales are more restrictive.

    But for the purposes of moving this thread forward, let's for the moment pretend that my mums money is hers to do with as she pleases, as long as she can pay the bills.

    She wants to spend some of her money - she's never had any as she's been constantly spending on buying a house and never really had spare to spend it or enjoy it.

    I'd love it if she spent some of her money on nice things for herself! Only she says she doesn't want to - she wants me to spend it.

    Now as far as I'm aware, the most she can gift me is £3k a year (£6k in first year). But I suspect she's going to end up buying "things" and giving them to me - there is precedent - she once bought me a second hand caravan I never asked for or wanted.

    I don't want to screw either her over, or me over if she does end up buying me something expensive, and I need to make sure she's aware of this so she knows whether it's a stupid thing to do or not! I'm aware that gifts over £3k are allowed but may be subject to tax if she dies in less than 7 years, but that always seems to be in relation to inheritance tax and I know her assets are under the inheritance tax threshold. So how does that work?? I'm confused so don't really knoe what to say to her.

    And that's assuming the money is really hers to spend in the first place!
    • onwards&upwards
    • By onwards&upwards 16th May 19, 10:24 PM
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    onwards&upwards
    • #7
    • 16th May 19, 10:24 PM
    • #7
    • 16th May 19, 10:24 PM
    Lol so the question is actually ‘how much money can my mother hand over to me?’
    • James Blonde
    • By James Blonde 16th May 19, 11:35 PM
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    James Blonde
    • #8
    • 16th May 19, 11:35 PM
    • #8
    • 16th May 19, 11:35 PM
    There are 2 questions. Fundamentally, yeh, that's one of them.

    Nobody will believe me if I say I'd rather she spent it on herself. I would - it's her money. I'd love her to have a nice holiday somewhere for example - she's never had one and I've been telling her for years even before her health deteriorated - but she won't and now her health means it would prove difficult. Her idea of spending money is going to the charity shop. I tried to encourage her to get some new furniture when she moved - she wouldn't. She's already said she'd rather I spent some of it. I've argued (really, honestly) but she's insistent and I reckon, given what's happened before, she'll do something off the wall if I don't have an answer for her. Yeh, part of me does have eyes lighting up in glee screaming "show me the money!" and buying things I don't need, but I know it's not that simple, and that money won't go far. I really just wish her and my stepdad had spent it on themselves in the first place.

    And that's all assuming she can spend it as she sees fit in the first place!
    • Fire Fox
    • By Fire Fox 17th May 19, 4:41 AM
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    Fire Fox
    • #9
    • 17th May 19, 4:41 AM
    • #9
    • 17th May 19, 4:41 AM
    "Nobody will believe me if I say I'd rather she spent it on herself."

    We are far more likely to believe that if you are up front rather than skirting around the issue. You are not the only person with older parents who happen to be comfortably off!

    AFAIK it would be better to do one off lump sum gift(s) to immediate family, which are certainly permitted as far as the taxman is concerned. That would appear more above board than drip feeding, which could easily look to the state like 'deprivation of assets'.

    It would be worth reading official websites like Gov.uk or Citizen's Advice Bureau or Inland Revenue. And/ or your mother making an appointment with the solicitor to discuss her options as far as cash gifts/ update her will/ prepare Power of Attorney documentation. These are simply about making things much easier for you later down the line, not about the money itself.

    HTH.
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️ Trainee Rosie the Riveter.
    • getmore4less
    • By getmore4less 17th May 19, 5:26 AM
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    getmore4less
    If all she has is £150k forget IHT and things like the 7y rule and £3k limits they just don't apply.

    Worry about them if she wins the lottery.

    I think you need to research the rules that apply and what is paid for and what is means tested,(benefits and costs)

    This looks like a reasonable starting point.

    https://careinfoscotland.scot/

    Get an updated assessment of the benefits, income and outgoing.
    Get the assessors to guide her on what she can do with the cash.

    With savings rates being low an option that can work is she lends you a chunk of it.
    (loans are not deprivation)

    An example would be to payoff/down a mortgage of your own to reduce your outgoings, you then pay her back when she needs it.
    • getmore4less
    • By getmore4less 17th May 19, 5:32 AM
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    getmore4less
    Deprivation can be subjective.

    One of lump sums that have no other purpose than to off load cash are more likely to be seen as deprivations.

    In this case you can use IHT mitigation as the primary reason, someone with excess over their nil rate bands could offload for IHT and leave themselves plenty.

    If someone has a pattern of giving like birthdays and xmas then proportional gift would be acceptable.
    • 74jax
    • By 74jax 17th May 19, 5:39 AM
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    74jax
    My dad wanted to give me and my brother some. We just took it. Popped it in an account and when he died used it to support mam in the care. He got the reassurance we had his money and felt at ease.

    Your mam will need care later on and being able to chose the care is a huge plus point. Let her give you it. Say you don't want anything but will keep it for a rainy day. Then when she is assessed as giving money away (and as though she still has it) it makes no difference because you step in and use it.

    Of course this is if a you say as above you don't want anything. If you do, then go ahead, but be careful your mam might be assessed as still having it.
    Forty and fabulous, well that's what my cards say....
    • onwards&upwards
    • By onwards&upwards 17th May 19, 7:52 AM
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    onwards&upwards
    My dad wanted to give me and my brother some. We just took it. Popped it in an account and when he died used it to support mam in the care. He got the reassurance we had his money and felt at ease.

    Your mam will need care later on and being able to chose the care is a huge plus point. Let her give you it. Say you don't want anything but will keep it for a rainy day. Then when she is assessed as giving money away (and as though she still has it) it makes no difference because you step in and use it.

    Of course this is if a you say as above you don't want anything. If you do, then go ahead, but be careful your mam might be assessed as still having it.
    Originally posted by 74jax

    Only potential problem with that is if something were to happen that meant the OP might need to claim benefits. Then the money sitting in an account in his name becomes more complicated because then he needs to worry about deprivation of assets for himself.

    Iíd let her give me small gifts but nothing more than £50-100 every few months. Donít let her have your bank details, tell her you donít need it now and she doesnít need to worry because if she doesnít spend it it will come to you in the fullness of time anyway.
    • Gavin83
    • By Gavin83 17th May 19, 11:48 AM
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    Gavin83
    Only potential problem with that is if something were to happen that meant the OP might need to claim benefits. Then the money sitting in an account in his name becomes more complicated because then he needs to worry about deprivation of assets for himself.
    Originally posted by onwards&upwards
    Or he dies, or gets divorced, or gets into debt...

    Ultimately OP the only other real issue is if she needs to go into a care home in the future. Given the circumstances you've described this isn't entirely unrealistic. If she's given away a large sum of money (£50 here and there would probably be accepted) then it's likely she'll be assessed as still having the money. This will likely leave her with a large bill she is unable to pay. As long as the bill is paid they won't really care but if it isn't and they can't recover it from her funds (as she's given it to you) they'll chase you for it instead. I know cases where peoples entire life plans have been torn apart due to social services taking them to court for a large sum of money so tread carefully. You're probably best off treating it as not being your money and just sticking it in a savings account somewhere.

    I'd also be careful about some of the advice on this thread too. Honestly, it makes no difference if it's drip fed or given in one large sum and the idea of it being a loan seems somewhat pointless as well. If put in the situation social services is likely to determine that having a large outstanding loan isn't in her best interests and will cash it in.

    I do like the idea of using it to pay off your mortgage though. You just need to consider that there will be the potential that you'll need to remortgage in the future.
    • Newly retired
    • By Newly retired 17th May 19, 2:36 PM
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    Newly retired
    As her house sale hadnít gone through when she moved into the sheltered accommodation and negotiated rent, fees, benefits etc, I am guessing that her home was not taken into account. Once it is sold, she may need to be reassessed and she may well have too much capital to qualify for whatever financial help she is now getting. So I suggest this is the first thing to check out.
    She wonít be affected by IHT rules, so can give you money without the tax man getting worried when she dies, if she wishes, but if she is drawing means-tested benefits then deprivation of capital may come into it.
    If she needs to move into a full care home, that will mean a further assessment. At that point she may have to pay her own care costs, until the money is used up, leaving her with a certain sum, around £28000 I think without checking. The website you were given earlier will explain. At that point, if she has given you loads of money you might be called upon to pay or contribute to her care costs.
    So beware of spending it all! Encourage her to spend it on herself now. Maybe you could go on holiday together if she does not want to go alone?
    • Archergirl
    • By Archergirl 17th May 19, 4:01 PM
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    Archergirl
    Yes, I was going to say go on holiday together, that would be nice x
    • sheramber
    • By sheramber 17th May 19, 5:45 PM
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    sheramber
    https://careinfoscotland.scot/topics/care-homes/paying-care-home-fees/deprivation-of-capital/
    • James Blonde
    • By James Blonde 17th May 19, 6:18 PM
    • 41 Posts
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    James Blonde
    Thanks all!

    May suggest the holiday option again. I'd love her to go away somewhere nice and at least do something she's never really had the opportunity to do but she's been reluctant before, I suspect due to her mobility.

    I *thought* her assessment took into account her assets as well as any cash, the the house was part of the assessment, but I'll check with the housing association financial advisor now its sold.

    I don't think she fits the deprivation of capital rules yet, but one to be wary of - it could be something that might hit her in the future.

    I was wary of her giving money to me, and I think what's been said means I was right to check and right to be wary.
    • LilElvis
    • By LilElvis 17th May 19, 7:12 PM
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    LilElvis
    If your Mum eventually needs higher levels of care then I think you (and she) could well be shocked at how much it can cost. My MIL is preparing herself for the time when she can't cope in her own home and has put her name down for a care home. We have had to sign as guarantors for four years worth of fees - £237,000 - and that's for the lowest level of care - the highest level is an eyewatering £7,400 per month. £150,000 won't go very far if she wants to end her days in a nice setting of her choice.
    • kangoora
    • By kangoora 18th May 19, 12:44 AM
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    kangoora
    If your Mum eventually needs higher levels of care then I think you (and she) could well be shocked at how much it can cost. My MIL is preparing herself for the time when she can't cope in her own home and has put her name down for a care home. We have had to sign as guarantors for four years worth of fees - £237,000 - and that's for the lowest level of care - the highest level is an eyewatering £7,400 per month. £150,000 won't go very far if she wants to end her days in a nice setting of her choice.
    Originally posted by LilElvis
    The OP lives in Scotland which I presume will be similar costs to my area which is one of the cheaper areas in England for care home fees.

    You can get a nice care home in my area of the country for £600 to £700 a week, my dad was in a very nice one just down the road at £650/week. Average rates in Scotland appear to be £639 for residential care and £850 for nursing care. These are averages so obviously you could pay a lot more - or even less........

    Certainly the OP should look into care home costs but putting in figures like £60,000/year and higher rates of £7,400/month when you don't know where they live or standard costs in that area is not very helpful.
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