What's this scheme called please

Libman

Kate1949

Not to me it wasn't. I'm a simple soul. Or a bit thick!

With you there Kate. Too many keyboard warriors spitting feathers about what they consider is right - as usual. You only asked for advice - not opinions.?‍♀️

1) I don't think you know what keyboard warrior means.
2) I don't spit feathers because I am rational and can form a cogent argument
3) What I consider to be right happens to be the law of the land. Heigh ho.
4) If you don't want opinions, don't come on a discussion site ??

I apologised at least twice to Kate1949 and she got lots of good advice.

Barmeyoldbat

German………mum yes it was all explained to us just as you wrote. We have been tenants in common for some years now as before marriage we were living together and I had given up my house and put the small amount of money I made into his new home. It gave me some protection. We put the trust in place when we made new wills, he has no children. We understand about the trust etc, also if Mr B goes first and I am left I will then be sharing the ownership of the house with my son. I understand it all and at the moment I am happy with it, it is not fraudulent as other posters have indicate and we took advice from three different solicitors.

I think what you have arranged is what a lot of couples do if tenants in common. If the house is the main asset then it’s a way to pass half to a child upon the first death and then the remaining part upon the death of the surviving partner.

However, it’s something I cannot do as I live alone so on my death my house goes to whoever I state in my will, hence inheritance tax being incurred - I only get one IT benefit rather than two which widows get.

Does anyone know if capital gains tax is charged on the increased value of a child’s share of the house from when it is inherited to when it is sold? Had my parents been tenants in common and my dads half bequeathed to me, then capital gains tax would be a lot as he died 38 years before my mum did. I know that because we rented out mums house when she went onto a care home, we will be subject to capital gains tax from probate to when we sell the house once the current tenant leaves.

Doodledog only just seen your inquiry about paying rent on a property. It only applies where you own and live in a property, like a family home, give it to someone to get it out of our estate and continue to live in it as you did before. It goes no further than that. Your age when you do this is irrelevant. If a 40 year old person chose to give their house to one or all of their children, but still live in it as the family home, they would have to pay the market rent to their children.

It is a case of not having your cake and eating it Not giving your home away and living in it for free.

As for dowager duchesses, most big estates are held by completely separate companies from the owner of the family title with boards of directors of which the person with the title may not be one. Most are run very commercially and the dowager duchess and her son the duke, probably pay rent for any accommodation they live in, whether the Dowager Duchess in the Dower House or the current Duke in a flat in the west wing.

Urmstongran

On this topic I wholeheartedly agree with volver and GSM. ?

From the cradle to the grave, Urmstongran

Unless you get, for example, dementia.

Yes Calli.
Another can of worms.

volver

Libman

Kate1949

Not to me it wasn't. I'm a simple soul. Or a bit thick!

With you there Kate. Too many keyboard warriors spitting feathers about what they consider is right - as usual. You only asked for advice - not opinions.?‍♀️

1) I don't think you know what keyboard warrior means.
2) I don't spit feathers because I am rational and can form a cogent argument
3) What I consider to be right happens to be the law of the land. Heigh ho.
4) If you don't want opinions, don't come on a discussion site ??

I apologised at least twice to Kate1949 and she got lots of good advice.

Thank you for clarifying the correct meaning of keyboard warrior Volver. You are correct.

Did I mention you by name Volver?

Kate didn’t ask for opinions, she asked:
There is a 'scheme' whereby you can put something in place which means you don't lose your home if you have to go into care. We can't remember what it's called. Does anyone know?

You and others decided to offer your opinion. Kate did indeed get some good advice but she clearly felt under attack from some of the responses.

Sometimes I wish you would offer your rational and cogent argument in a a less aggressive manner. That’s my opinion and it is directed at you Volver.

It’s not always illegal to do what some of the posters have done to protect their finances. It may be sometimes if by doing so was it was deemed to be a deliberate deprivation of assets. It may also be morally questionable but why not give the facts and let others decide for themselves?

No Libman you did not mention me by name. However Libman you have mentioned me now. Thank you for telling me what you think of me Libman. It won't make much difference to me Libman, it won't affect how aggressive I am, or at least how aggressive you think I am Libman.

I think we had an interesting thread recently that covered, among other things, how threads meander. A great example here, I think.

We were almost talked into doing something like this but thought better of it . It was going to cost a couple of thousand to set up and the more we read about it the less likely it would be legal in trying to avoid your house being sold for care needs. My DH also is of the belief that we should pay for our own care. If one of you is still living in the house it cannot be sold for care needs , in Scotland anyway . One thing you have to avoid if you are left alone in the house is dowsizing as then half of the excess money can be used .

If posters can’t speak their mind GN is going become so anodyne as to be tedious.
Were people supposed to just say this scheme is called X
And Leave it at that ?
So it’s not a discussion forum ?

PS I reckon Volver has been pretty restrained??

Floradora9

We were almost talked into doing something like this but thought better of it . It was going to cost a couple of thousand to set up and the more we read about it the less likely it would be legal in trying to avoid your house being sold for care needs. My DH also is of the belief that we should pay for our own care. If one of you is still living in the house it cannot be sold for care needs , in Scotland anyway . One thing you have to avoid if you are left alone in the house is dowsizing as then half of the excess money can be used .

The problem is, though, that the OH might not be able to stay comfortably in the family home, particularly with heating bills going up so drastically.
If care home fees are paid out of income and savings which then rapidly become depleted it could become difficult.

Here is a situation I cannot get my head round.
If someone needs care, only their half of joint savings is taken into account, or the whole of their personal savings if they keep them separate.
So what if one spouse spends lots of their money on expensive antiques, or collectibles, or clothes, for example. Are they taken into account?
If not, and their assets are below the threshold, the LA covers their care costs., yes?
If the other spouse is a saver, not a spender, are they expected to contribute to their partner’s care? If they do, there might be nothing left for their own care, if needed. Money they have saved, not spent. Is that right?

As I said, I never met anyone who deliberately spent all their money to live on the state.
I wasn't suggesting that people deliberately spend in order to live on the state; more that living on the state is what happens when people have spent all their money.

As an example, I know someone (let's call her A) who earns in the region of £80k a year (this was pre-Covid, and is maybe a lot more now given the nature of her job), yet has no savings, rents her house and has run up significant debt on credit cards and bank loans. She has expensive holidays, she and her partner both have high end cars, they eat out most nights and spend freely.

I see nothing wrong with that - she has earned the money and it is up to her how she spends it. She has a blasé attitude to the future (her favourite phrase is 'you can't sue a corpse') and she is happy for her sons to make their own way in life, as she did. Again, that is a reasonable attitude, and it is her choice. A is in her early 60s, and will be working at least until she is 66, because of no savings and a rented house etc. She has a tiny pension coming, as she was automatically enrolled when the workplace pension came into force - but previously her attitude was that she'd worry about that when the time came, and 'they' wouldn't let her starve.

Fast forward and the chances are that she will be in a similar financial situation, not because she has had no opportunity to save, but because she has chosen not to, (as is her right) yet if she needs care she will get it free, which is as it should be, given that there is no alternative.

A is a real person, but her (mythical) twin sister, B, who worked in the same job on the same salary, but lived more frugally, paid into the pension scheme and bought a house that she hoped would provide a nest-egg for her daughters, would have to pay for the same care, sell her house and leave them with nothing*. In the interim, A will, presumably, get pension credit and help with rent, council tax, dentistry etc, and B (if she existed) would not, as she paid into an occupational pension.

I wouldn't blame B for feeling resentful, even though A hasn't deliberately disposed of her assets, as if both needed care there is a good chance that B would be left with nothing, in the same way as if she had spent money along with her sister.

*I understand that a lot of people don't think that leaving the children anything is important, but my point is that A and B should both be able to make the decision whether to leave something behind, yet only A's choices are respected by the system. B has no right to choose what to do with her own money, and whether I personally approve more of one lifestyle or the other is not important (I am not judging) - a compulsory system should be fair.

And yes, Libman - on a discussion site it is not unreasonable for people to discuss a situation.

To answer your questions, Cabbie:
If the person needing care has accumulated antiques and collectibles, they are assets to be valued and taken into account when their care fees are assessed.
If the value of all assets is below the threshold, yes the LA covers fees.
The other spouse doesn’t have to contribute to the costs of the person in care out of their assets or income.

Libman, you must realise that attempting to avoid paying care fees is a very contentious issue. If someone had told Kate her husband was talking about a trust, without saying more, it would have implied that it’s a method which works and is perfectly acceptable. It doesn’t work and it’s not acceptable - it’s attempted fraud.

I would call it a legal loophole rather than fraud

Thank you GSM for that clarification.
But to take that scenario a but further, I reckon a spouse with savings, Spouse D, would struggle to sell off their partner’s assets like collectibles, rather than a high end car for example, as quickly as is needed.
Or Spouse D might be very unhappy about the conditions in a council funded care home ( if partner has no assets to sell). Either way they might feel that their own money needs to be used to fund a better home for their partner, even if there is no legal obligation.
There is often debate about whether a married couple should have separate bank accounts. Many don’t, so half of their joint savings will be taken into account. Anyone who has put money into ISAs ( Individual Savings Accounts) will have separate savings. No easy answers.

A loophole is a lacuna in the law which can you can perfectly legally use to your advantage . Putting money into a trust to attempt to avoid care fees is not lawful and therefore is not using a loophole. It’s attempted fraud.

Germanshepherdsmum

To answer your questions, Cabbie:
If the person needing care has accumulated antiques and collectibles, they are assets to be valued and taken into account when their care fees are assessed.
If the value of all assets is below the threshold, yes the LA covers fees.
The other spouse doesn’t have to contribute to the costs of the person in care out of their assets or income.

The Age UK site says that:

Personal possessions (chattel) cannot be included in the assessment, provided eligible capital is not used to purchase them to avoid care costs., suggesting that so long as they haven't been bought immediately before going into care, someone could have Ming vases worth more than a house, but they will be disregarded. Is that not the case?

Also, if a couple are joint tenants, does the non-cared for partner keep all of the assets when a single person would lost theirs?

If Spouse D can’t sell the antiques etc sufficiently quickly then interest will accrue on the unpaid fees Cabbie. Yes, Spouse D might wish to use some of their own money to pay fees for a better home and that’s not unlawful but by so doing they may end up without much money and in the same home they paid to get their spouse out of. Sad situation.

Germanshepherdsmum

A loophole is a lacuna in the law which can you can perfectly legally use to your advantage . Putting money into a trust to attempt to avoid care fees is not lawful and therefore is not using a loophole. It’s attempted fraud.

I can see that if someone goes into care and then gives away their assets then it could be assumed that the two things were linked, but if I gave my savings to my children now, and lived on my pension who could say whether I had been looking ahead or just feeling generous? By this I don't mean that nothing could be proved, I mean that the intention could be one thing or the other.

It seems that there are so many inconsistencies (eg a couple with a joint account being treated differently from one with two separate ones) that it is impossible to judge someone's morals based on decisions that may or may not be based on a desire to avoid fees that may or may not be incurred in the future.

Libman

Kate didn’t ask for opinions, she asked:
There is a 'scheme' whereby you can put something in place which means you don't lose your home if you have to go into care. We can't remember what it's called. Does anyone know?

...Kate did indeed get some good advice but she clearly felt under attack from some of the responses.

I can understand that she might have felt "under attack" however, considering the nature of social media - the randomness of individuals posting on it - and the 'moral maze' of Social Care, I think she - or any of us - have to accept that a scheme which might encompass "deprivation of assets" is going to elicit some criticism from those who believe that asking the State to pay for you so that your offspring can inherit your wealth is morally unacceptable. And it is a debatable issue isn't it? As is the assumption made by some that those without assets have spent lavishly throughout their lives when the reality might be that they have simply not earned enough to save anything because they worked doing essential but 'disparaged' jobs. The kind of jobs that most don't want to do but without which the whole fabric of society would disintegrate.

If I attempt to deprive the State of my assets so that I can hand them over to my son - who is now an independent person making his own way in life through his own endeavour and work - am I any different to the elite wealthy individual who avoids paying tax into the infrastructure that allowed / enabled him to accrue his wealth, offshoring it into a protected bank account? There's a principle involved here.

I'd love to be able to leave my property, intact, to my son and grandchildren. It may or may not happen. Fortunately my son is of the opinion that I should use my wealth (such as it is) to look after myself, and my partner, in old age. And, considering that a certain amount of luck got me to where I am now - it wasn't all down to my own hard work - I agree with him. Not everyone will get the opportunities I had - nor the luck. And, who will be picking up the tab anyway? The current workforce, saddled with years of Austerity, stagnating wages... and now the horrendous energy price increases.

Social Care is now a commodity - the service is an industry and it's subject to the market place rules. But that's a debate for another time.

Well said Dickens

What did Tony Benn set up which enabled his children to avoid paying inheritance tax?

That must have been legal but perhaps that loophole has been closed now.

volver

If I have a million pounds in tbe bank and you have 20 pounds in the bank, is it OK for me to avoid paying for what I need so that my children can have the million pounds?

I just don't understand that morality, sorry.

It wasn’t for care home fees, but a friend of ours was awarded 50% of the cost of adaptations to his home, when he had 2 houses paid for (one was rented out) and well over £1m in the bank - which I know because dh was an executor just a few years later.

It’s not as if he’d paid loads in taxes either - most of his working life was abroad, mostly in Saudi Arabia, with salaries free from any kind of income tax.

I do still wonder why he wasn’t expected to disclose financial assets as well as actual monthly income.

I think she - or any of us - have to accept that a scheme which might encompass "deprivation of assets" is going to elicit some criticism from those who believe that asking the State to pay for you so that your offspring can inherit your wealth is morally unacceptable. And it is a debatable issue isn't it? As is the assumption made by some that those without assets have spent lavishly throughout their lives when the reality might be that they have simply not earned enough to save anything because they worked doing essential but 'disparaged' jobs. The kind of jobs that most don't want to do but without which the whole fabric of society would disintegrate.

That is a spectacularly one-sided view, masquerading as neutral .

Who has assumed that those who get free care have spent lavishly? I think I am the one who has posted most disagreeing with the two-tier system, and I have repeatedly said that this is not where I am coming from, and that in a fair system those who earn less would pay less, but we would all be covered if we need it, with those who are lucky enough not to need care subsidising those who do. I have not seen anyone 'disparage' a job on this thread - have you?