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    • PG2018
    • By PG2018 10th Mar 18, 9:32 AM
    • 7Posts
    • 1Thanks
    PG2018
    Paying of mother's mortgage - care cost concerns
    • #1
    • 10th Mar 18, 9:32 AM
    Paying of mother's mortgage - care cost concerns 10th Mar 18 at 9:32 AM
    Hi

    This is my first post here and I am not even sure if it is in the right place, but I would appreciate any thoughts even just who to go to for advice:- CAB, Council etc..

    My mum was left in a bad financial situation when dad passed away some years ago, including a mortgage of c. 140,000 which comes to an end in June. I am fortunately in a position to help and put the funds aside a few years ago to provide for this liability. However, I am somewhat concerned about the implications should my mum, at some, point need to move into a home. I understand the council would look at my mother's assets and, if mum needed to go into a home, they could potentially sell the house. Whilst I don't necessarily have an issue with this in general, I do not think it would be reasonable for "my" money to be taken if this situation did arise.

    Are my concerns legitimate? If so, what action could I take to ring fence the funds? Is evidence of the funds coming from my bank sufficient?

    Very many thanks
    Last edited by PG2018; 10-03-2018 at 9:35 AM.
Page 1
    • cattie
    • By cattie 10th Mar 18, 9:42 AM
    • 7,762 Posts
    • 5,291 Thanks
    cattie
    • #2
    • 10th Mar 18, 9:42 AM
    • #2
    • 10th Mar 18, 9:42 AM
    Even if you tried buying the house off of your mother & she needed to go into a care or nursing home anytime during I believe the following 7yrs it can be considered deliberate deprivation.

    Some folk may be tempted to look to putting house into trust in order to avoid care home fees, but don't be too hasty.

    By putting your house into trust and naming someone (usually your children) as the Trustees, you no longer own your house, and should you have to go into care, your property assets would no longer be calculated as part of means testing - however, although that's the logic behind putting your house into trust, in practice it can be a bit more of a minefield.

    On the surface, it might seem like the perfect way to protect your children's inheritance, but local authorities are increasingly wise to these type of schemes, with teams in place to ensure residents are not using them to get out of paying rising care costs.

    For advice the best people to contact are probably Age UK as they no doubt deal with this kind of query regularly.
    The bigger the bargain, the better I feel.

    I should mention that there's only one of me, don't confuse me with others of the same name.
    • pmlindyloo
    • By pmlindyloo 10th Mar 18, 9:47 AM
    • 11,500 Posts
    • 13,384 Thanks
    pmlindyloo
    • #3
    • 10th Mar 18, 9:47 AM
    • #3
    • 10th Mar 18, 9:47 AM
    I do believe that there is a way around this but you should seek legal advice.

    This article may be useful:

    https://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11983481/If-I-pay-Mums-mortgage-will-I-get-the-money-back-if-she-sells.html

    Even though the daughter is paying off the mortgage by monthly repayments then I believe the principle applies.
    • PG2018
    • By PG2018 10th Mar 18, 9:48 AM
    • 7 Posts
    • 1 Thanks
    PG2018
    • #4
    • 10th Mar 18, 9:48 AM
    • #4
    • 10th Mar 18, 9:48 AM
    Even if you tried buying the house off of your mother & she needed to go into a care or nursing home anytime during I believe the following 7yrs it can be considered deliberate deprivation.

    Some folk may be tempted to look to putting house into trust in order to avoid care home fees, but don't be too hasty.

    By putting your house into trust and naming someone (usually your children) as the Trustees, you no longer own your house, and should you have to go into care, your property assets would no longer be calculated as part of means testing - however, although that's the logic behind putting your house into trust, in practice it can be a bit more of a minefield.

    On the surface, it might seem like the perfect way to protect your children's inheritance, but local authorities are increasingly wise to these type of schemes, with teams in place to ensure residents are not using them to get out of paying rising care costs.

    For advice the best people to contact are probably Age UK as they no doubt deal with this kind of query regularly.
    Originally posted by cattie
    Thanks Cattie

    I suppose the issue is I don't want this money to be seen as my mum's assets. I suspect I might need to buy a share of the house when I pay the money across but I would rather avoid this for various reasons.
    • elsien
    • By elsien 10th Mar 18, 9:49 AM
    • 16,414 Posts
    • 41,470 Thanks
    elsien
    • #5
    • 10th Mar 18, 9:49 AM
    • #5
    • 10th Mar 18, 9:49 AM
    If you're lending her the money to pay the mortgage off, would it be possible to put a charge on the house so that when it's sold you get that amount back?
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
    • PG2018
    • By PG2018 10th Mar 18, 9:51 AM
    • 7 Posts
    • 1 Thanks
    PG2018
    • #6
    • 10th Mar 18, 9:51 AM
    • #6
    • 10th Mar 18, 9:51 AM
    I do believe that there is a way around this but you should seek legal advice.

    This article may be useful:



    Even though the daughter is paying off the mortgage by monthly repayments then I believe the principle applies.
    Originally posted by pmlindyloo
    Cheers,

    I spent ages Googling various combinations of parent/mortgage/deprivation etc but didn't find this one. I shall have a read.
    • PG2018
    • By PG2018 10th Mar 18, 9:52 AM
    • 7 Posts
    • 1 Thanks
    PG2018
    • #7
    • 10th Mar 18, 9:52 AM
    • #7
    • 10th Mar 18, 9:52 AM
    If you're lending her the money to pay the mortgage off, would it be possible to put a charge on the house so that when it's sold you get that amount back?
    Originally posted by elsien
    Cheers

    Yes, this is a solution I have considered. I really need to take legal advice but don't even have a solicitor at the moment...
    • elsien
    • By elsien 10th Mar 18, 9:55 AM
    • 16,414 Posts
    • 41,470 Thanks
    elsien
    • #8
    • 10th Mar 18, 9:55 AM
    • #8
    • 10th Mar 18, 9:55 AM
    Cheers

    Yes, this is a solution I have considered. I really need to take legal advice but don't even have a solicitor at the moment...
    Originally posted by PG2018
    Some solicitors do free half hour introductory sessions. Might be worth booking one as a starting point. Showing the money coming from your account probably isn't enough as you could have gifted it to her.
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
    • PG2018
    • By PG2018 10th Mar 18, 10:10 AM
    • 7 Posts
    • 1 Thanks
    PG2018
    • #9
    • 10th Mar 18, 10:10 AM
    • #9
    • 10th Mar 18, 10:10 AM
    Some solicitors do free half hour introductory sessions. Might be worth booking one as a starting point. Showing the money coming from your account probably isn't enough as you could have gifted it to her.
    Originally posted by elsien
    Thanks again.

    The whole situation will no doubt be complicated by the fact that there is already a second charge against the property for a secured loan, although this is relatively small.

    One final question if you donít mind? Although I am looking to use this tactic legitimately, what is stopping anybody using this method to enact an unscrupulous deprivation of assets? I.e does the charge have to be tied to me loaning the money and be done at the same time?
    • Mojisola
    • By Mojisola 10th Mar 18, 10:12 AM
    • 29,261 Posts
    • 74,723 Thanks
    Mojisola
    Whilst I don't necessarily have an issue with this in general, I do not think it would be reasonable for "my" money to be taken if this situation did arise.
    Originally posted by PG2018
    If you're lending her the money to pay the mortgage off, would it be possible to put a charge on the house so that when it's sold you get that amount back?
    Originally posted by elsien
    As elsien says, don't gift your mother the money, lend it to her.
    • PG2018
    • By PG2018 10th Mar 18, 10:17 AM
    • 7 Posts
    • 1 Thanks
    PG2018
    As elsien says, don't gift your mother the money, lend it to her.
    Originally posted by Mojisola
    Cheers

    Maybe a formal loan agreement would be sufficient then and there is no need to put a charge on the property.
    • LilElvis
    • By LilElvis 10th Mar 18, 10:46 AM
    • 3,559 Posts
    • 9,808 Thanks
    LilElvis
    Cheers

    Maybe a formal loan agreement would be sufficient then and there is no need to put a charge on the property.
    Originally posted by PG2018
    There is no way round paying for proper legal advice. You might find that your loan will be treated as secondary in importance to both the existing charge and the need to pay for care fees and you could be left with nothing.
    • PG2018
    • By PG2018 10th Mar 18, 10:48 AM
    • 7 Posts
    • 1 Thanks
    PG2018
    There is no way round paying for proper legal advice. You might find that your loan will be treated as secondary in importance to both the existing charge and the need to pay for care fees and you could be left with nothing.
    Originally posted by LilElvis

    Good advice mate. I will certainly be speaking to a solicitor, but I was just pondering whether a formal loan might, in fact, be all that is required.
    • Mojisola
    • By Mojisola 10th Mar 18, 10:51 AM
    • 29,261 Posts
    • 74,723 Thanks
    Mojisola
    The whole situation will no doubt be complicated by the fact that there is already a second charge against the property for a secured loan, although this is relatively small.

    One final question if you donít mind? Although I am looking to use this tactic legitimately, what is stopping anybody using this method to enact an unscrupulous deprivation of assets? I.e does the charge have to be tied to me loaning the money and be done at the same time?
    Originally posted by PG2018
    Of course it has to be tied to a loan - councils are well versed on all the deprivation cons that people attempt and will query anything that does look right.

    Maybe a formal loan agreement would be sufficient then and there is no need to put a charge on the property.
    Originally posted by PG2018
    I would still put a charge on the property as well. It protects your money.

    If your mother doesn't have a lot in savings but ends up needing residential care, you may be asked about paying a third party top-up fee so that she can be in a more expensive care home than the council funding will pay for. Worth reading up on the issue so that you don't have to make decisions in a rush.
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