Another inheritance question

Good point witzend. When my parents paid £1000 each per week they were basically subsidising other residents who had no savings but had the same accommodation, meals etc provided - and using what they thought would/should have been our inheritance to do so.

One thing that’s not often mentioned on the question of safeguarding inheritances from care home fees, is that your own idea of when it really is time for 24/7 residential care, may well be rather different from that of the social worker making the decision, if you are not self funded.

I’ve heard many times of relatives who are carers of people with dementia, being on their knees with stress and exhaustion well before social services would agree - regardless of their pleas. One family carer I knew of grew so desperate that she eventually told SS that if they didn’t do something - now - she was going to take her relative to A&E and leave him there.

It might sound odd, but having had 2 self-funded close relatives with dementia, I look on it as something of a ‘luxury’ to be able to choose the time and place, rather than being dependent on the tender mercies of social services. Who, to be quite fair, are all too conscious of the huge cost of full time residential care - even if fees for anyone council funded are typically quite a lot less than for any self-funder.

Interesting reading Niobe.
Extravagant spending would be deliberate deprivation but if you have to go into a care home it will be months before the LA find out there is no cash.
What are they going to do?, chuck you out, in practice they have to care for you.

If it’s spent, it’s spent, how are they going to reclaim it from the cruise companies etc. Anyone who takes equity release disposes of assets.

I’ve no intention of doing any such thing it’s just a “what if”

www.ageuk.org.uk/search/?q=Deprivation+of+Assets
Anyone considering how to avoid care home fees needs to get the correct info.

Davidhs sounds like that idea would come under deprivation of assets, although maybe it’s different in Scotland -

‘If someone intentionally reduces their assets - such as money, property or income - so these won’t be included in the financial assessment for care home fees, this is known as ‘deprivation of assets’. If your local council concludes you have deliberately reduced your assets to avoid paying care home fees, they may still calculate your fees as if you still owned the assets.’

Equity release is a minefield best avoided.

One thing for sure if you have a house with no mortgage you have paid a lot of tax over the years. The Government make the tax rules an encourage house purchase and saving because it saves them providing housing. They also allow you to give away anything tax free if you live 7yrs it’s just one of the ways you can help your children ( or any one else ).

As an alternative you could get an equity release and go on a spending spree, a cruise 4 times a year or gamble it away, while you can still enjoy it. Then there is no way it could be claimed for care but most of us would prefer to do something constructive with the cash.

Mumofmadboys Niobe It is not naive or unfair or unlawful. It is in quite within the law to transfer your assets to your children (in Scotland anyway). My parents paid their taxes all their lives and like many others wanted our family home to be passed on to their children when they died. It was not a grand mansion, just a modest family home and there would have been no capital gains tax to avoid. They just wanted to leave us something after their years of hard work and paying all their appropriate taxes and NI. We do not pay for 'care' in Scotland so they were only required to pay for 'board and lodgings' in their respective care homes. £1000 a week each. For one small room, shared bathrooms with other residents and food (which was minimal as their appetites diminished). I have never tried to cheat the system and it is not some 'cunning plan' to avoid any taxes due. The only unfairness is being told to buy your house, save money so that you can leave an inheritance to your children when in fact that is nonsense unless you are extremely rich.

Hetty, an awful lot of people do many things and get away with it and many don’t. Many people cheat the Benefit system or the VAT and tax systems and get away with it but many are caught and fined or imprisoned. Doesn’t mean to say it’s right and we should all do it.

Hetty58 a clear conscience need never fear a knock at the door demanding identification or a letter from the taxman.

Niobe, (really?) - I think that you are just as naive as Parker sheen!

Loads of people get away with doing it!

Officially, you live elsewhere (and somebody else lives in your house) including bills and post - that's all there is to it.

I know people who do just that. When was the last time somebody knocked on your door and demanded you prove your identity?

The will arrangements only work out if both of you enjoy good health and never need residential care.

Those that do need care often lose their entire lifetime savings and property.

If you gift your house to your children you must pay market rent for all the time you live there.

They must fulfill all the legal obligations of a landlord and pay for that and they must pay tax on the rent as it is income.

Parker sheen, you are very naive if you think that your cunning plan would work! The tax people are onto all these type of plans. You cannot give your house to your children and continue to live there and still avoid carehome fees or inheritance tax.
I do wish people would get proper financial advice and educate themselves on financial matters.

Is that fair parkersheen? You seem to want to avoid paying care home fees and let the taxman pick up the bill.

Woodmouse49, the house issue is sorted, thanks. We are tenants in common, so the will is set up that the survivor can stay in it or sell it to buy a different property, but in second death each half goes to two children, so they all inherit equally. One pair may have to wait a long time though.

It is not that I don't want DH to benefit from my savings, but I don’t really want his children to,( assuming he hasn’t spent them all). Putting it in writing seems callous though.

Having had to sell our parents' house to pay for their accommodation when they had to go into care homes (alzheimer's), my parents would have been extremely upset if they knew my sister and I had to do this and that we did not inherit the family home. So I have always thought that when I reach 70 I should transfer or 'sell' our house to our children so that they have the inheritance I want to give them. This would be me assuming that 1) I would reach age 80 as I believe house transfers have to be done 10 years prior to having to go into care and 2) that my children would not throw me out of my home once I have transferred the deeds to them!!!!

Just read your next comment Cabbie21. State in your will that your savings are being left to your children.

You are almost in the same position as myself except DH has one child and I have two.

You could write your DH out of your will but if you want to protect your Estate for your children, you can create a type of Trust in your Will that allows your surviving spouse to live in any property that you own and also receive any income from the Trust for their lifetime whilst ensuring that the underlying capital in the Trust is preserved for the children.

That's what our solicitor has done with both our wills.

If you want your children to have your estate upon your death (if you die before your DH), what will happen to the house which is in both your names?

It definitely needs a solicitor to advise you.

The problem may be that DH has little in the way of savings. He is a spender, so has a large collection of valuables, also gadgets, tools and books. It will take a lot of work to raise money from these, or otherwise dispose of them.
I on the other hand have savings, including money inherited from my parents.

Yes, sounds very sensible to me. Always good to keep Wills updated anyway I would think, and a solicitor is the best person to advise you.