Deprivation of assets question.

[Brizzle]

My mum who suffers from Alzheimer’s has expressed a desire to help me pay towards my daughters private education in terms of a regular payment each month out of earnings. I am an older single dad of one who cares for my mum around 6 hours each day. Both her and my late dad helped towards my brothers two children’s education some years ago and now she wants to do the same for me to avoid my daughter having to attend a very poor local secondary school.She has a reasonable sized savings account that has remained untouched for years and which will in the not too distant future be used to pay for care at home costs as her needs increase.This will have a clear audit trial for many years showing no money has gone elsewhere.

My question:- will a regular payment out of earnings towards my daughters private education be deemed by the council as “deprivation of assets “ when my mums savings account towards care is exhausted in maybe 2 years or so?

To me some deprivation of assets are quite clear like giving the house away or huge lump sums but other areas seem quite grey.

Any advice would be most appreciated.

 

[nitram]

Out of earnings only applies HMRC and exempt transfers.
For what it's worth I think the LA would regard the payments as deliberate deprivation of assets.

 

[Jessbow]

I agree with nitram.

if you foresee a need to pay care costs, any money that goes elsewhere, however well intentioned , would be seen as such.

I think my s & Bro in law have just made ( and paid a solicitor) to make a stupid choice.
She had a stroke two years ago ( no dementia) and has a carer 7 days, and they have just changed the house to tennants in common

If her husband predeceases her ( she is 63, he 15 years older) the house will be' safe' and exempt her from care fees. I think not.

 

[nitram]

Half the value of the house will be protected (it would have been the whole value before CA 2014) if the husband leaves his share to A N Other than his wife, with joint tenants the house would have passed to his wife outside of any will.

Change of tenancy from joint to common is not deprivation of assets, both before and after the change the wife owns half a house.

She no longer inherits her husband's share if he predeceases her.

 

[canary]

I dont think that your s and bro understand about tenants in Common @Jessbow.. OH and I have done this and its perfectly OK. We both still own half of our house, so no deprivation of assets, but the point is that we have both left our half of the house to our children in our wills. If I predecease him and he has to go into a care home, his half of the house will be used for care home fees, but my half (which was never his) will be left to the children.

Regular payments to the grandchildren, though, are an entirely different thing and I too think that this would be seen as deprivation of assets. OH and I have in the past helped our children out financially, but I have had to tell them that we cannot do it anymore.

 

[Banjomansmate]

Isn’t there a limit of something like £2,000 that you can give as gifts per annum? School fees would be more than that.

 

[Duggies-girl]

Isn’t there a limit of something like £2,000 that you can give as gifts per annum? School fees would be more than that.

3000 a year tax free but you can give more as long as you remain below the inheritance tax threshold which is quite high nowadays.

It can be quite complicated if you are very affluent.

 

[Beate]

You are probably thinking about inheritance tax laws. They should NOT be confused with deprivation of assets. Everything that is given to other people as a gift, fully knowing that her money may run out in two short years, will be classed as deprivation of assets, unless it's a few bob for birthdays or Christmas, in keeping with previous gifting behaviour.

 

[jugglingmum]

3000 a year tax free but you can give more as long as you remain below the inheritance tax threshold which is quite high nowadays.

It can be quite complicated if you are very affluent.

The Inheritance tax rules state that you can give £3,000 to one person as a gift in a year, if it is out of savings and it doesn't count for IHT (inheritance tax)

Anything that is gifted out of income (I presume what the OP refers to as earnings) which wasn't spent and wasn't needed to live off is also IHT free.

If more than £3000 is given no tax is paid, but it reduces the tax free sum on death, unless the donee survives 7 years.

However deprivation of assets and IHT are 2 separate things.

And the question here is deprivation of assets related, which this to me is, as there doesn't seem to be enough funds to cover care going forward.

 

[Brizzle]

Previous “ gifting behaviour” involved my mother and father helping to support my brothers children in their private education. If my mother had cancer right now her previous “ gifting behaviour” would not be questioned even though she might survive longer than other poor souls like herself that have been cursed with Alzheimers.

However I accept that the council will take away her last piece of dignity and her attempt to do some good for her grand daughters education while she still has at least some sanity left. I now have to tell my mum ,”sorry the council says no” . ...and watch the tears well up in her eyes...The irony in all of this is that by paying for private education you are actually taking the pressure off council paid state education.In her final days of “mindfulness “ the council are taking away perhaps the only final piece self purpose and power to make a difference that my poor mother has.

History will not look kindly on the perportraitors that treated people with Alzheimer’s as second class citizens when compared to people with other life ending diseases. It’s all so sad.

Thank you for all your replies.

 

[Lynmax]

Brizzie, I agree that it seems unfair. My mum has previously given large sums of money to her grandchildren to help them buy cars, rent flats, flight back to the UK for those who live in the US etc. Now she has Alzeimers and we have POA over her finances, it would appear she is unable to do the same for my son, who lives in the US but needs financial support through a divorce. She has enough capacity to understand what he is going through and wants to help him. As she is in denial that she has AZ and might need care in the future, she cannot understand why I say she cannot gift him some money. Several years ago she gave my nephew, also living in the US, £20k for some legal fees following an accident. She can afford it but I worry about the implications of doing it now. It seems very unfair that all her other grandchildren have benefitted from her generosity but the youngest one can't.

 

[jenniferpa]

@Lynmax - you do understand that if your mother has substantial assets the issue of deprivation is unlikely to come up? Personally in your place I’d be inclined to look into setting up a low interest loan (the interest being comensuarate with what she could get for a safe investment) with perhaps a clause that it is forgiven on her death. That way she is protected in the event that her assets are depleted at an unexpected rate, no one can claim that she intentionally deprived herself of those assets, and her grandson gets the help he needs now.

The other thing you need to remember that when it comes to deprivation, the approach of the LA is to take the position that you still have the assets in question. In practical terms that means that if you give away £10k, say, you will not recieve la support until your assets reach £13k approximately and you will then pay pensions and tariff income as if you still had the £10k. What I’m trying to convey is that she (or you as her attorney) aren’t going to be sued - it’s more an accounting issue.

 

[Juniorjunior]

Sorry, but feel compelled. I too benefited in small financial assistance from my parents when I was young. Early 20's and just starting out in renting then mortgage and career. They fixed a washing machine, paid a bit to decorator, contributed to car repairs. All done with the generosity of spirit they had for my sisters and I throughout our child hood. They both worked ridiculously hard for the family. It makes me so angry that if people have assets that can ease the need for "council" assessment and reliance on over stretched social services to enable you to access flexible care for your vulnerable person why wouldn't you be hanging onto every penny of THEIR money to do this. My mum and dad would have been horrified they had worked so hard all their lives and their children didn't benefit on their death, however as an adult I would be horrified if I didn't use every single penny to provide the best most flexible form of care for either of them. I do not and do not want to benefit financially from my parents if I can somehow ensure their care is available when as a family we feel we need it.
I appreciate everyone's situation is complicated when partners/ shared assets are involved and agree partners should protect each other from losing homes etc. I however feel that although past behaviour benefited other members of the family this was in very different circumstances.
I am sorry for the tone of this post I really am. I have used TP for about 9 months and apart from some posts I have found it very supportive. This post is now going to be counted in the ones I didn't feel helpful. I appreciate while in the depths of caring for a loved one we need kind words but having just lost my very loved and cherished one and reflecting, I just wish I could have her back and I would have moved heaven and earth to care for her a little longer. I did have poa, and started to purchase small amounts of care. I wish I had done more sooner if I'm honest but not out of reticence of spending money but from thinking things were better than they were.
Parent, grandparents aunts and uncles money is theirs. They may never have wanted not to pass an inheritance on or assist financially with family needs but it is their money which they now need. As adults we are now their support backup not the other way around.
Sorry, I hope everyone in all their individual circumstances can appreciate my opinion which is only my opinion and forgive my rant. I do recognise this has been a bit of a rant generally.

 

[Louise7]

I agree with the above. I think if people really appreciated the lack of choice there is when you do not have the funding to pay for care yourself then they'd be doing everything possible to ensure that money is saved for care costs.

 

[Rosettastone57]

I agree with the above. I think if people really appreciated the lack of choice there is when you do not have the funding to pay for care yourself then they'd be doing everything possible to ensure that money is saved for care costs.

@Louise7 ditto in agreement. Money gives choices. I am thankful that my mother-in-law had the finances to sort out both carers and eventually a care home easily with family support.

 

[chippiebites]

I have to agree with the above posts. My lovely Mum worked hard all her life, but never had money to give her children, but lots of love, while Mum lived with me after a stroke her care was funded by LA. My Husband at 85 with Vascular Dementia and still at home has to pay for the care that I can't provide. I think that is fair. If Husband has to go into a nursing home he would pay for that, I wouldn't expect anything else. It is his money until he dies, inheritance is what's left.

 

[Sirena]

I agree with the four posts above. My mother's savings are running down at the rate of about £2.5k a month on care home fees, she has enough for about another 4 years and I hope she does not outlive her funds. Our LA announced last year it is cutting services to the legal bare minimum to avoid going bankrupt. My mother's care home is one of the less expensive ones in the area and the LA used to be their biggest client, but they no longer accept LA because the fees are so low.

The fact she had money meant I could buy her far better, and earlier, care than SS would have provided (a social worker told me this herself). It is her money and I never expected to see any of it. She did not give me any financial help during my entire life so I guess that is why I have no expectations.

 

[canary]

There really is no dignity in being in your own home if you cannot remember that it is your home and are walking out at night semi-naked, or are living without washing and changing your clothes with increasing incontinance, or are eating gone off food because you do not realise that it has gone off (doesnt help the incontinence), are frightened to be left on your own and are getting into arguments with neighbours about things that have not happened (but you think they have).

If anyone thinks that I am making this up or exaggerating, I should point out that this is exactly what mum was doing before she moved into a care home. My mum moved into a care home from hospital, but this was 5 years ago and she was self-funding. If this happened today and she was dependent on LA funding Im sure that they would have sent her home with carers 2 hours a day max. This is why she needed her savings and I was so glad that she had it. Fortunately she passed away before her savings ran out, but other people in this position have had to either pay large sums of money in top-up fees (they have to come from family), or moved them to another care home they may not have chosen themself.

 

[Shedrech]

hi @Brizzle

I now have to tell my mum ,”sorry the council says no” . ...and watch the tears well up in her eyes...

jenniferpa has offered a suggestion to help

maybe consider sparing your mum from the full details of the situation - certainly one of my priorities with dad was keeping him as settled and happy as possible even if it meant keeping some things from him or telling a few 'love lies'; I asked myself what would be gained by sharing 'bad stuff' with him rather than taking on that 'burden' myself - after all there were times when my parents quite rightly kept details from me - you might thank her for her generous offer, so she feels good, and let her believe you can fund the place or her grandchild hopes to attend the local school with her friends ...?

 

[Elle3]

Just a slightly different perspective on giving money away to family etc. My friends husband died suddenly and unexpectedly last year. He has basically left her penniless, investments he had always said would pay for their retirement she found out were almost worthless and money she received from his life insurance policy, she had to use to pay off credit card debts and bank loans which she did not know about. They also lived in rented accommodation which she could no longer afford to pay for.

This situation had all come about because of how generous he had been to their three daughters whilst he was alive. Buying them cars, paying deposits on houses, paying for expensive holidays for them and giving them large gifts of money. He always assured my friend they could afford it as he had a good job and they would buy a house etc when they decided where to settle down. My friend is now struggling to survive, she hasn't worked for many years and is partly sighted and her daughters can't pay back money given to them and they can't afford to help her out either.

We all need to think about what we do with our money and what our parents do with theirs. We should never assume or rely on our parents to help pay for things we want or need because we never know what the future holds for any of us.