How far back in time can council go back re: assets

[blue4ever]

New to this great forum and looking for help in terms of possible future care costs.

My mum gifted my sister and me some of her assets a few years back.

She hadn't been diagnosed with alzheimers at that time.

It looks like she might need some care from the council.... in the future.

I'm anxious that the council could look into her past financial affairs and claim her gifts back off my sister and me.

Is this possible?

Thanks in advance for any advice.

 

[tryingmybest]

I believe it's 7 years.

 

[Kevinl]

Hi blue4ever, welcome to TP.
My LA asked for the last 3 months bank statement but some go back a year or 2 I believe. I think it helped that she got pension credits which means that her finances had been looked at by the "government " it had been proved that she did have a low income.
A friend of mine did have a bit of an issue when he tried to get help as his mum lived in a nice big house, nice area, lots of lovely furniture and things and the LA couldn't get over the idea that you can be possession rich but cash poor, which she indeed was so they went back a few years to make sure she hadn't gifted it away.
While someone has capacity and there's no reason to believe that care will ever be needed then you're free to do as you wish with your money, may people gift away money to avoid inheritance tax which is not levied on money given away 7 years before you die, but that's an inheritance tax rule not an LA care funding one.
The "deliberate deprivations of assets" rules are for when people give money or property away in order to make the LA fund, if no one older could give money away while there is no reasonable expectation of care being needed then the Bank of Mum & Dad would have to close down as no one would be allowed to help their children out financially.
K

 

[Kevinl]

I believe it's 7 years.

For inheritance tax not LA funded care.
K

 

[blue4ever]

Hi blue4ever, welcome to TP.
My LA asked for the last 3 months bank statement but some go back a year or 2 I believe. I think it helped that she got pension credits which means that her finances had been looked at by the "government " it had been proved that she did have a low income.
A friend of mine did have a bit of an issue when he tried to get help as his mum lived in a nice big house, nice area, lots of lovely furniture and things and the LA couldn't get over the idea that you can be possession rich but cash poor, which she indeed was so they went back a few years to make sure she hadn't gifted it away.
While someone has capacity and there's no reason to believe that care will ever be needed then you're free to do as you wish with your money, may people gift away money to avoid inheritance tax which is not levied on money given away 7 years before you die, but that's an inheritance tax rule not an LA care funding one.
The "deliberate deprivations of assets" rules are for when people give money or property away in order to make the LA fund, if no one older could give money away while there is no reasonable expectation of care being needed then the Bank of Mum & Dad would have to close down as no one would be allowed to help their children out financially.
K

 

[blue4ever]

Thanks for this and your information.

My worry is - why would they look at the last 3mths statements or maybe 2 years.

Surely there is a rule/law about how far they can go, or is it subjective depending on which LA you live in?

 

[tryingmybest]

It seems they can actually go back further than 7 years

https://www.google.com/url?sa=t&sou...FjAFegQIABAB&usg=AOvVaw3wR2gQhfiB41Lg9vpPfXnd

https://www.google.com/url?sa=t&sou...FjAKegQIBhAB&usg=AOvVaw3d2wXFE6livKbmNW7MNRGW

 

[try again]

I thought the rules were you can gift money as long as at the time of gifting you did not expect to need help. If she was well at the time, then the la should disregard this.
I thought the seven year rule was different and had to do with possible inheritance tax if the giver died within seven years , it could then be considered as part of the estate.

 

[Beate]

For deprivation of assets they can go back as long as they like if they suspect foul play. Few councils actually do.

 

[Kevinl]

Thanks for this and your information.
My worry is - why would they look at the last 3mths statements or maybe 2 years.
Surely there is a rule/law about how far they can go, or is it subjective depending on which LA you live in?

First question, is that they look at the assets over a period of time to stop the taxpayer being ripped off. If as soon as you have memory issues you put everything in the kids name the taxpayer has to pick up the bill for your care and the family keep the money.
As long as the lifestyle, occupations and various other factors are consistent with you wealth or lack of it then there shouldn't be an issue, where someone has an occupation, house, car, neighbourhood consistent with being wealthy yet claims to be poor the LA will want to dig deeper to see where the money has gone.
There is no limit as to how far back the LA can go if they suspect something doesn't add up and tryingmybest's second link is interesting as it spell out something I've said on here before, putting a house in a trust can be seen as a deprivation of assets.
If Dave was a mechanic and his wife Jane worked in a cake shop, they live in a terraced house, just average wage people living an average life then the LA can see why the money might run out over time and they may be asked to help. If Nigel was a brain surgeon and his wife Camilla was a university lecturer and they have a 5 bed detached in a posh part of town then the LA will want to know why they're being asked to pick up the bill if they claim poverty and ask for LA funding.
There's so many places out there openly advertising on the internet that they can help you avoiding paying care home fees that the LA have to be careful, putting a house in trust or money beyond their reach is an industry designed to rip off the taxpayer so the LA's are taking it on, they just treat you as still having the asset and invite you to take them to court.
There will be a case sometime in the future and a judgement about what can and can't be done but a gift, before any diagnosis or suspicion of dementia, as I said earlier would effectively ban any parent from helping out their children and I doubt that is ever going to happen.
K