Care costs

Perfectly normal. Most of us are concerned about having enough money to be able to afford the care we may need later on in life.

Many people's concern is trying to protect their assets from being eaten up by care costs so that their children can inherit them. Unfortunately that is virtually impossible to do. If and when you need care your LA will, if necessary do a forensic analysis of your past and present assets and if they think you have dispose of them with the intention of avoiding care costs they will make your financial assessment on the basis that you still have these assets and it is up to you to get the assets back or cope with the very little care the LA contribution (if any) will cover.

Some people have tried giving their house to their children very early in retirement, but if you do this you must pay your children the full market rent for the property. If you do not the LA will act as described above and if you go into a care home they will take the value of the house into account in assessing their contribution. Every year HMRC will require you to prove that the rent you are paying is the market rent and if necessary will make their own checks.

The best thing you can do is to go and see a solicitor specialising in wills and associated matters and take his advice.

what happens if a house was left with the proviso it be passed to the next generation ? A GP passing a house to her child for life ?With insructions it had to go to the GS

Through my work I have in the past seen some very sad situations when parents have tried to gift houses etc to their children and parents have ended up with unsatisfactory care when they need it and family not helping. Quality care costs, it is hotel living with added care/nursing. The state funded places are often underfunded. I would advise anyone to make sure they put their own care needs into future planning as a priority, it may not be needed, many have worked hard to pay a mortgage and build a nest egg, be sure you plan so you are cared for in comfort during your life time.

paddyann It doesn't matter how you dispose of the property, if you continue to live in it you must pay the market rent to the owner. If you live there without paying rent, for care purposes and inheritance tax purposes you will be considered the de facto owner and the value will be taken into account when calculating your contribution to residential care costs and Inheritance Tax

Put quite simply, the Local Authority and HMRC are up to every ruse to try to protect assets from being taken into account for care or IH. As fast as someone finds away around their demands they block the hole. It is simpler all round if people just accept that they are responsible paying for their own care in old age, if they can and children accept that the care of their parents is the fair and proper use of any assets their parents have and that an inheritance is not their right.

Quite right M0nica!

This is all really useful . Mor suggestions always welcome . Thank you and don’t stop now!!

Richard, your concerns are very reasonable and sensible. As I see it one has to work round the system as it stands to the greatest advantage for you and your wife and the children. But it's not easy and you need good advice.
Personally I think you should live in a house or flat that is the most convenient for you and close enough to your children should you need it. So you have a happy independent life for as long as possible.
Going in to a care home is so expensive. If you can cope with private carers and family support it maintains your investment in the house. But you need to consult someone who deals with inheritance planning.

Don't you all think it is so annoying that if someone had claimed bennifits and lived in a council house will have the cost of a care home covered but if you had worked and saved hard to own your home then the government will penalise you big style.

So what's supposed to happen Nanawind? People may have been on benefits because they needed to be on benefits. If they need care in old age they need care.
That may be tough on those who have been lucky enough to save but, after all, you can't take it with you!

All I'm saying Jane 10 is what is the point of saving up to own your home when you are penalised big style.

If someone has depended on benefits and has never had the chance to own their own home, how could they have saved enough to fund their own elderly care.
Reminds me of the argument I hear occasionally that no pensioner should have to pay income tax.
If you've enjoyed a decent job and the advantages of home ownership, have savings and a reasonable pension, why would you suddenly be totally dependent on the state because you need more support in old age?
If you can afford to pay your way you do so. If you can't then the welfare state we all support steps in to care for the most vulnerable.

In what way am I being penalised
if I can and do pay for my own care using my own assets?

I am in the middle at the moment of trying to arrange care in the home for my mother - she is desperate not to go into care- she only has the state pension and attendance allowance, with a tiny amount of savings (enough for her funeral) we have had a social service assessment and are now waiting for a financial assessment - the social services lady seemed to try to warn us that mum might not qualify for financial assistance.

If that is the case, we might as well all give up now!

Don't you all think it is so annoying that if someone had claimed bennifits and lived in a council house will have the cost of a care home covered but if you had worked and saved hard to own your home then the government will penalise you big style.

So you think that the government should give a lot extra in benefits so that people can fund care homes? otherwise how on earth would they afford it?

The huge benefit you get if you have saved is that you can afford a much nicer care home than people reliant on Local Authority standard payments. When we looked around for my DM a few years ago it would have been virtually impossible to find a decent care home for the ca.
£600/week that the local authority paid. Of the 3 care homes on our short list (the 3 that we would be prepared to leave her in) - the cheapest was £850/week. The nicest and one we all agreed on was £1,000/week.

So having savings gives you the ability to choose a better standard

Original question: yes, it is normal to be concerned. There is lots of information on sites such as AgeUK and CAB. Money Saving Expert is useful too.
It is OK to gift money to family members whilst you are hale and hearty. There are no strict guidelines around 'deprivation of assets' for care cost purposes (see above).
You can consider trusts. There are, for example, trusts you can set up and pay into for the purposes of children's education, and you may want to google those.
I understand that you can put a house in trust. I became aware of this when a distant family member, who needed significant care, had to sell the house that he (and other family members) regarded as a family home rather than 'his'. However, that was not the legal situation; and a cousin told me that it should have been put into a trust. However, that has its own implications, around who can authorise its sale, in what circumstances etc. and you need very specialist advice.

Although it can be headline grabbing, actually,most people do not end up spending enormous sums on care. I think the average stay is less than 2 years, and regular pension income funds a good bit of that. So some people are spending a lot on elaborate schemes that may backfire, in order to avoid spending a relatively small sum.

Somebody has to pay!
Why should my children pay taxes so that your children can inherit a nice sum?

At the 'young' age of 66, it occurs to me that, as long as I don't need nursing care, I would rather pay to stay in a hotel rather than a care home - and at £850 a week for a care home, it would be cheaper! I wouldn't get my meals included, but other than that, have I missed something?

Nannarose if you put a house in trust and continue living in it then you MUST pay the market rent, otherwise trust or no trust it will be treated as if the occupant still own it. The HMRC will demand evidence that the rent paid is the market rent and that it is actually paid.

I was once sent to visit an elderly man who had put his house in trust. Rents in his area, central Oxford, had rocketed and he had lived well into his 90s. When I went to see him the monthly market rent for his home exceeded his monthly income from all sources. He was in arrears on the rent and having to live on the charity of his children and expecting another rent rise.

Most people who live in LA or HA housing, live there because they cannot afford anything else and often need benefits to pay that rent.

The idea that they are all high rollers spending all their cash on pleasure while living on the state is a myth. Most are, and always have been on low incomes and consider themselves lucky if they can put enough aside to pay for their funeral. Of course there will be the exception that proves the law but generally people in public sector rented property are poor people who cannot fford to save, which is why social services has to pay for any care they need.

Personally I am so relieved that the money I have acquired in life will be there to pay for all the care I or DH will need in the future. If every penny is consumed in care costs so be it, I will be sorry not to have left anything to my children, but not repine.

I think people with assets trying to slide out of paying their way in old age and expecting tax payers worse off than themselves to fund their care instead so they can leave large sums of money to their generally well educated and above the breadline children are beneath contempt.

Quite simply, its fraud if you try to squirrel away money. Benefit fraud. Everyone would be up in arms if people who lived on benefits tried it.

I totally agree with MOnica regarding selfish people who want the taxpayer to pay for their care so that they can leave a larger inheritance to their children.

My two brothers, their wives, my husband and I looked after our mum financially and and physically in her last year's. She had a small house and just a little money plus her basic state pension. She did not qualify for any benefits and feared spending her savings ' in case they ran out' !

When she died we all inherited an equal share of her estate which, because of the value of her house, was a considerable amount. If your children want to inherit your estate they need to care for you in old age.

not meMonica my husbands granny left her house with this in her will ,can it be taken off his mother for care in these circumstances as she is allowed lifetime use of it?Or must the original will be adhered to.It was written 60 odd years ago.

Paddy an, surely a person who is given the right to live in a house cannot actually sell it so it it is not part of her assets and cannot be sold to pay for care. I would get legal advice.

At the 'young' age of 66, it occurs to me that, as long as I don't need nursing care, I would rather pay to stay in a hotel rather than a care home - and at £850 a week for a care home, it would be cheaper!

Unfortunately these days most people who enter care homes would not be capable of living by themselves in a hotel.

My mother did not go into a care home until she was unable to cope with 5 visits a day at home (3 from carers and 2 from family) and even with family taking care of shopping, meal prep, cleaning and laundry etc.