Inheritance Tax/Care Home Fees/Depravation Assets

Keep_pedalling wrote: »

It would be extreamly foolish for your mother to give away her one major asset. This is almost certainly going to be classed as DDA, and the LA can claw the money back from the recipients, through the courts if nessasary. The fact that she is already in need of help makes it even more likely.

Apart from the money she is also giving away security, you need to think what would happen to her is her children pre deceased her or ran in to financial trouble through losing their job or getting involved in a messy divorce. She will also have no fall back if the proposed arrangement does not work out. Having an elderly parent move in can put a huge strain on families, and I certainly will neve4 look to do this with either of my children.

Our dad died just before Christmas and mum needs some help with her day to day living (meals prepared, help getting dressed, bills paid, clothes washed) but is not in need of full time residential care. When dad died she was initially in hosptial for a while and then a care home for a few weeks until the funeral and until her children could work out what options mum had. The family home was horder style and not safe for SS to put in carers coming 4 times a day etc and so mum went to live temporarily with one of her children whilst the other gutted the house, got repairs done, decorated etc with a view to mum coming back to live in the family home with SS putting in carers initially on a 4 x a day visit (for which mum would pay a contribution) and mum paying separately for additional things being done.


Mum has already lived with one child for 7 months now and her house was just about ready for her to move back into but she has now decided that she does not want to live alone, does not want to be lonely and wants to stay living with either one of her children.


For the past 7 months she has been paying Council Tax, Insurance etc on a house she is not living in and although it is being visited regularly by the other child who is doing all the work trying to sort it out there is always a burgler/squatter risk and of course in winter if it is not heated etc then that is not good.


The child who mum is with has been able to "make it work" on a temporary basis but for it to have a permanent chance of success the accommodation neeed for them all *has* to be larger, preferably with a room for mum to have all to herself with her own permanent bed in, tv, ensuite. Since this child is renting it is an easier option for this child to rent somewhere far bigger/more suitable for the current needs (providing this child has the extra £500 pm gained by the debts being paid) than for the other child who is in a mortgaged property. That is the main reason this child is the one looking to have mum there until her death than the other, that, plus the fact that the child in question has a baby and a toddler which are part of what has given mum a new lease of life - being around and cuddling her very young grandchildren.


If mum does deteriorate in years to come then the other child will take her into the other family home as that child is not working, has young children (but older than baby/toddler) and is able to get up several times a night if mum needs it without fear of how it will impact on having to do a full time job the next day.


Mum's original plan/intent was to go back to the family home, live alone but with SS visits and that is what we originally tried to facilitate. Now that she is 7 months on from dad's death and has had time to settle and enjoy the company of one of her children and her young grandchildren she has realised that she does not want to live alone and be lonely. That is why we are now trying to facilitate her in her new request.


Mum does have some "fall back" in the sense that the child she lives with has critical illness cover and all sorts of other policies to ensure money comes in if no longer able to work. She also has the "fall back" of going to live with her other child and that family. It would be unlikely that both of us, her children, die before mum does and if we did and our own families therefore all fell apart there would be no one for the LA to reclaim any money from anyway and they would have to ensure mum was taken care of etc

Keep_pedalling wrote: »

Unless she gets partial ownership of the new property for her £50k then it may still very well be classed as DOA. There is no valid reason why the money needs to be gifted rather than make a joint purchase.

The £50K (or a bit less if it is just to clear the debt rather than having extra money to put a deposit on a mortgaged house) is just to clear the debt so no new property for her to have partial ownership in. The purpose of gifting the money to clear the debt is to release £500+ per month into that child's disposable income (from no longer paying the minimum interest charge to service the debt). It is highly likely that the bigger property needed will be a rented property so again no property for her to have "part ownership" in. However, if no suitable rented property can be found and it is deemed necessary to purchase a suitable property THEN whatever £ mum "gifts" to cover the deposit of such a place could be written into the contract that she has a 10% share for eg in that home. I assume then that a potential future care home debt would just accrue for her once all her other assets had been used up and the LA would have a DOA claim on 10% of the house value at the time of it's purchase which could perhaps be paid on a monthly payment schedule basis.