Putting home into family trust to avoid nursing home fees
Comments
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No it isn't. It's a legal minefield.
If half the house is owned by the children then that half is part of their assets. The house could be subject to a forced sale if one became bankrupt, and it counts towards their assets if one divorces. If they don't live there then the children pay capital gains tax on their share when the house is eventually sold. If the spouse who still owns half goes into a home and the house isn't sold at that point then the council simply place a legal charge on the property for the care fees they've paid, and recover the money from the proceeds of sale when the house is eventually sold. Meanwhile the children have to maintain an empty house ....... or if one of them lives in it then they either have to pay rent to the parent in the care home who who owns half the house, which the council will use to pay the care fees, or the council will simply assume that rent is being paid and stop paying a portion of the fees to the home that is equal to the "notional" rent and if you don't like it they'll let you take them to court - where they'd probably win.
And those are just the obvious pitfalls .......
Ther really isn't an effective way of the last remaining spouse avoiding the sale of the home to pay care fees. If there was an effective method then the government would legislate to stop it - but they haven't done because a foolproof method doesn't exist.
Apart from that, less than one in ten homeowners end up in care homes anyway, so it is daft to deprive yourself of ownership of your home when there's at least a 90% chance you'll live in it until you die.
What would happen if a child had purchased, at market value, say half of their parents' house and lived there with their family, and the parents, one parent needs care, then dies, then the remaining parent needs care?
Once the parent- in- question's savings were used up, could the council place a charge on the house and eventually force the family to sell their home to pay the debt?
Does the "half a house has no value" type thing have any bearing on such a situation?0 -
Veryannoyed wrote: »Do you like paying for the lazy lifestyle choice of the sort of people I had the misfortune to catch on the Jeremy Kyle show this morning?
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Of course I get angry at wasters living the life of Riley on our taxes, more so now that I am retired. Thankfully, that sort are still in a small minority.
However, that is not the point. Tax and contributions to society don't work like you suggest.
I would suggest that we have all had countless, and difficult to count, benefits - education, the police, the armed forces etc. Some people might even say the Royal family.
If someone can afford to pay, but doesn't, we ALL have to pay extra in taxes. You and your parents will have paid for someone doing just as you are wanting to do.Member #14 of SKI-ers club
Words, words, they're all we have to go by!.
(Pity they are mangled by this autocorrect!)0 -
pollypenny wrote: »
Of course I get angry at wasters living the life of Riley on our taxes, more so now that I am retired. Thankfully, that sort are still in a small minority.
However, that is not the point. Tax and contributions to society don't work like you suggest.
I would suggest that we have all had countless, and difficult to count, benefits - education, the police, the armed forces etc. Some people might even say the Royal family.
If someone can afford to pay, but doesn't, we ALL have to pay extra in taxes. You and your parents will have paid for someone doing just as you are wanting to do.
Think we may need to agree to disagree and I must point out that my mother is more than paying her dues at the rate of £46,800 per year. That's on top of all the taxes she and my father paid the state while they were working, and the very onerous inheritance taxes paid on my father's estate. She's also still paying income tax on her pensions (only a tiny one is a state pension) as well as tax on income from letting out her property.
It seems to me that taxes are all one way and benefits are all the other way and it's very difficult for decent taxpayers to qualify for benefits which other people just hold their hand out to get.
I was hoping that there would be some form of insurance scheme for the future, to make the system fairer, but that scheme seems to have hit the buffers.0 -
Veryannoyed wrote: »Think we may need to agree to disagree and I must point out that my mother is more than paying her dues at the rate of £46,800 per year..
How can someone paying money for their own personal care be said to be "paying their dues " to society?0 -
Oldernotwiser wrote: »How can someone paying money for their own personal care be said to be "paying their dues " to society?
Personal care does not cost £46,800 per annum. Or rather, it should not cost that amount.
It could be called fleecing someone in need of more than 'personal care' to feather the nests of those who know they can steal from the sick to give to the well.
Veryannoyed, I'm wondering if this is a generation thing. People like your Mum grew up in a world where you did as you were told, you worked all the hours available, you never sat on your bum and expected anything you couldn't afford, you obeyed the laws of the land, you paid your taxes and your National Insurance contributions, and you never questioned those things.
Your Mum and Dad were told that they would be cared for if ever their health deteriorated and they needed the NHS (which was set up for that very purpose) to provide care to meet those health needs. They kept their part of the contract.
The contract wasn't broken by your Mum and Dad. It has been broken by the generation that have no idea what your Mum and Dad went through.
All we can hope is that the more recent generation who have demanded and received and have had all their needs met, will one day open their eyes, their minds and their hearts. Preferably before their health deteriorates.
Yes, I think your Mum has indeed paid her dues. In more ways than one. It's society that has failed to keep their part of the contract.0 -
Most care homes cost between £30-£40k+ a year and bearing this in mind, 2 things have occurred to me -
1. Some elderly people I have known have reached the state of needing care, but have only had their property and £2 or £3k in savings - in my actual experience with a relative their property sold for 25% less than its value 3 years ago and the amount left to start paying care home fees will last about 3 years (not long enough bearing in mind the good physical health, but poor mental state of the person concerned). Then they may well have to go into a very basic care home anyway as the local authority don't fully fund their care home!
and
2. We are fast becoming a nation of renters - what happens when there is no property to sell in old age anyway?
Just a thought...0 -
Morrison117 wrote: »Personal care does not cost £46,800 per annum. Or rather, it should not cost that amount.
It could be called fleecing someone in need of more than 'personal care' to feather the nests of those who know they can steal from the sick to give to the well.
Veryannoyed, I'm wondering if this is a generation thing. People like your Mum grew up in a world where you did as you were told, you worked all the hours available, you never sat on your bum and expected anything you couldn't afford, you obeyed the laws of the land, you paid your taxes and your National Insurance contributions, and you never questioned those things.
Your Mum and Dad were told that they would be cared for if ever their health deteriorated and they needed the NHS (which was set up for that very purpose) to provide care to meet those health needs. They kept their part of the contract.
The contract wasn't broken by your Mum and Dad. It has been broken by the generation that have no idea what your Mum and Dad went through.
All we can hope is that the more recent generation who have demanded and received and have had all their needs met, will one day open their eyes, their minds and their hearts. Preferably before their health deteriorates.
Yes, I think your Mum has indeed paid her dues. In more ways than one. It's society that has failed to keep their part of the contract.
I agree that it's very difficult to see how that sort of fee can be charged when the people who work in nursing homes are so poorly paid. My mother's home has two registered nurses and the rest of the staff are care workers who are paid a pittance. My mother's home is one of a number owned by a charity but it must be one of the most expensive in the UK.
What gets me, apart from the injustice that people who were prudent with their money are then forced to pay up for fees which those who spent all their money don't have to pay, is that there is a proper mechanism for continuing care funding but that these rules are now being deliberately wrongly applied by PCTs to deny funding to patients who clearly do meet all the criteria.
I wouldn't object to people paying a standard fee towards their care, perhaps through an insurance policy, but arranging any sort of fair system seems to be totally beyond politicians.
I've voted for Cleggie's mob since I was 18, I won't be doing so again!0 -
Most care homes cost between £30-£40k+ a year and bearing this in mind, 2 things have occurred to me -
1. Some elderly people I have known have reached the state of needing care, but have only had their property and £2 or £3k in savings - in my actual experience with a relative their property sold for 25% less than its value 3 years ago and the amount left to start paying care home fees will last about 3 years (not long enough bearing in mind the good physical health, but poor mental state of the person concerned). Then they may well have to go into a very basic care home anyway as the local authority don't fully fund their care home!
and
2. We are fast becoming a nation of renters - what happens when there is no property to sell in old age anyway?
Just a thought...
These are both valid points. We are currently looking into buying an annuity which would pay half the fees and the rest would be paid from my mother's pensions. However, these are not cheap and you need to have (as far as I can see) a very substantial amount of ready cash to buy them.
I think you're right that many younger people now will either never be able to afford to buy their own home so won't have an asset to sell in later life and even if they do manage to buy something, they will be older buyers probably still with a mortgage by the time they retire.
If we can see this then I'm not sure why politicians can't see that they need to get measures in place to deal with these issues sooner rather than later.0 -
Money Box Live: Paying for long term care
Wednesday, 21 December 2011 at 1502 GMT On BBC Radio 4
http://news.bbc.co.uk/1/hi/programmes/moneybox/9662734.stm
"You can call the programme when lines open on Wednesday at 1300 GMT. The number to call is 03700 100 444.
Or you can send an e-mail..."
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Thanks very much Alanq, sounds like a programme well worth listening to. I've sent a question.Money Box Live: Paying for long term care
Wednesday, 21 December 2011 at 1502 GMT On BBC Radio 4
http://news.bbc.co.uk/1/hi/programmes/moneybox/9662734.stm
"You can call the programme when lines open on Wednesday at 1300 GMT. The number to call is 03700 100 444.
Or you can send an e-mail..."0
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