What's this scheme called please

I just can’t see how there is so much moral certainty surrounding a system that seems to me arbitrary.

Yep about the only thing you get is a reduction in council tax

Yup, singles get it in the neck all the time?

Well there you go.

So yet another anomaly is that couples and singles are treated differently?

Oh it didn’t bold, sorry.

Germanshepherdsmum

If you make a will leaving your house to someone else on condition that your spouse can continue to live there, the will only comes into operation when you die and therefore no longer require care. In the meantime you continue to own it. If before you die you need care, the house will be included in your assets for the purpose of assessing care fees. The terms of the will are irrelevant. The spouse won’t be turned out but the local authority will place a charge on the house to recover unpaid fees (plus interest) when the spouse leaves. The person to whom the house was left in the will won’t get it unless they can pay off the care fees debt.

The LA won’t place a charge on the house while the spouse or legal partner still lives there

From the Government website.

Deferred Payments Section 2:4

“Providing your partner lives in your home as their main or only residence the local authority should exclude the value of your home when it assess your finances.
This means that you should not face having to sell your home to pay for care and *will not need a deferred payment agreement.” (my bold)

So there’s no charge on the house while one partner is still living there, not even as a debt to be paid later.

Not arguing with you GSM, but I think it’s important to get it from the horses mouth as it were

GSM just wondered have you ever lived in a communist country? Well I have and you shouldn’t knock it until you have

You can give as much as you want from income and it will not be subject to Inheritance Tax.

You can give up to £3000 a year in total from savings and this will not be counted in Inheritance Tax. (That not 3000 to one person, 3000 to another, it’s the total)

You can give as much of your savings as you want but then the seven year Inheritance Tax applies. Full amount given subject to Tax in the first year, less in the second year and so on.

But Inheritance Tax is something quite separate to deprivation of assets. Inheritance Tax happens after the person dies. Deprivation of Assets is when money is given away to avoid paying for care or taxes.

Life is not fair

Another 'wheeze' some people think will work is giving their house to their children, now this has a number of drawbacks ...... another drawback can be that if that child's spouse divorces them then the value of the portion of the property that that child owns is taken as a marital asset to be taken into account in a divorce settlement, could be a tricky situation
Am I right that if you do give your children £x amount per year hoping to live beyond 7 years to keep it out of inheritance tax, it has to be from income not from savings, if so that is a sort of protection against deprivation of assets maybe.

That will mean the taxpayer paying even more. Is that what you want for your children and grandchildren? I don’t.

There is a middle way, a fair cap on fees

Yes Doodledog, if Mr D died, not having needed care, and left his half share to the children, that would be theirs and would not be taken into account if you subsequently needed care. Similarly with any money or other assets he had left to them in his will. And the positions of A, B and C and the children are as you describe.

It’s entirely fair and reasonable for a couple to split their assets between them and this has not, so far as I’m aware, been criticised here. If they were to divorce there would likely be a 50/50 split. There is no wrongdoing at all.

No, it’s probably not fair that A has spent all her money on designer clothes and flash holidays and the taxpayer pays for her care. And it’s probably not fair that a couple have split their assets and the taxpayer bails them out too. Nor, probably is it fair that the very prudent B is subsiding both of them and her children inherit very little. But we will never, in the foreseeable future, have a system which requires nobody to pay for their care other than through their taxes. Then we will be asking if it’s fair that a stay at home mother who has hardly worked at all outside the home, even after her children had flown the nest, should receive care at the expense of those who had worked full time from leaving school until (even after) retirement age. There never will be ‘fair’ unless we descend into a communist state. Spare me from that!

Barmeyoldbat

No I am afraid it’s not fair but that is the way it is at the moment and something needs to be done to make it a fairer system for all from those with low assets to to those with more. So I make no apologies to anyone on this thread for having undertaken to protect some of my assets.

No need to apologise to me ).

Whilst I am hopefully at least 7 years away from the end of my life I am ensuring that my two adult children receive as much financial support from me as possible without leaving me short of money. I hope to be able to do this so that if my home needs to be sold to fund care for me it won't matter that there is no inheritance for them. I prefer to see them have the advantage of the money now and be pleased that they are not struggling.

Thanks Doodledog for explaining it so well and clearly

No I am afraid it’s not fair but that is the way it is at the moment and something needs to be done to make it a fairer system for all from those with low assets to to those with more. So I make no apologies to anyone on this thread for having undertaken to protect some of my assets.

Germanshepherdsmum

Whilst you have your 50% share you will be assessed on it. The LA don't ignore it because you've left it to someone else in your will!

No, but if, say, Mr Dog left his share of an 'in common' ownership of our house to the children, and I lived there until I needed care, the LA would only take my share into account against fees, which would already be at least some inheritance for the children. If we had also separated our savings, and his share of those had also gone to the children, then presumably they could keep that, and I would have £23k of whatever was left that I was allowed to keep? So I would still have to pay some fees, but the maximum would be 50% of the house value plus 50% of the savings minus £23k?

So unless this is wrong, let's assume that A and B above are, in fact, triplets, all of whom have had identical careers on identical salaries, and all need care in old age. For the sake of argument, let's also assume that they married men who were also employed in identical salaries and who all pre-deceased their wives:

* A gets her fees paid in full.

* B pays 100% of hers as she lives for long enough in the home to use up 100% of the house she has owned outright since her husband died.

* Neither A's nor B's children get anything.

* C, who has protected her assets as outlined at the start of this post pays only a percentage of her fees, and her children inherit 50% of the house value, 50% of the parental life savings, plus £23k disregard on C's savings.

But this is all fair?

Whilst you have your 50% share you will be assessed on it. The LA don't ignore it because you've left it to someone else in your will!

GSM I did ask not only the solicitor but a close friend who deals with the assessments, she is the financial assessments in the area my daughter lived. If you are tenants in common and one of you die and their 50% share is left to someone else, then if you need care they will only take into account 50% of the value of the property because that is all they own. There are w ways of looking at this, you, rather than waiting for the government have put a cap on what you can pay. You are not avoiding paying fees for care altogether just a reduced amount. I have done my sums, should I end up in a care home because I couldn’t take my morphine quickly enough then with my share of the house, pensions and savings I am ok for about 3 to 4 years. The other is to protect family members in the case of 2nd marriages. Please be aware I still don’t have any glasses so bear with me for mistakes.

If a couple own their home as tenants in common each of them can leave their interest in it to whoever they want and can stipulate that the other spouse can live there as long as they wish. Their share would be taken into account when assessing care costs and again the will is irrelevant until the death of the spouse who made it. If they own the house as joint tenants I don’t know if the local authority would take into account the entire value but I suspect they might. On the first death the survivor would automatically inherit the house, subject to any charge the LA may have placed on it for unpaid fees.

So do the same rules apply whether a couple are tenants in common or joint? And whether their bank accounts are joint or separate?

I still think the basic premise whereby B pays fees and A doesn’t is wrong, but if the answers to the above questions are both yes, then things are more straightforward.

Thanks for bearing with me ?

If you make a will leaving your house to someone else on condition that your spouse can continue to live there, the will only comes into operation when you die and therefore no longer require care. In the meantime you continue to own it. If before you die you need care, the house will be included in your assets for the purpose of assessing care fees. The terms of the will are irrelevant. The spouse won’t be turned out but the local authority will place a charge on the house to recover unpaid fees (plus interest) when the spouse leaves. The person to whom the house was left in the will won’t get it unless they can pay off the care fees debt.

Yes, but if you spilt the assets so that each of you owns half, and then make a will so that a third party inherits whilst the surviving spouse has a right to stay there, the house is protected.

That could be (and is) variously described as prudent and immoral, when the reasons for doing so are assumed, rather than known.

I wonder if I am misunderstanding something fundamental here? . The idea was suggested to us as a legal way to protect the house if we needed care down the line.

As I see it, people are saying that it is immoral to do anything to avoid paying fees, which is what this scheme is doing, and how it was presented to us. Yet it is, according to the same people, perfectly ok to do it if it is done for reasons unconnected to protecting your assets, yet no-one knows what those reasons are in any given case, and no-one needs to know?

I'm not being sarcastic - I just don't see how all of that can apply. I hope it makes sense, as I am about to head out to get soaked on my way to lunch.