At what point is a house sold ??

Discussion in 'Legal and financial issues' started by Dinwales, Jan 12, 2016.

  1. Dinwales

    Dinwales Registered User

    Jan 12, 2016
    3
    I am very new to the forum and to the problems discussed.

    It is unclear to me at what point a house must be sold.

    Is it soon after an aged person enters care
    or is it after the person dies ?



    If it is soon after the person enters care., then if ,for example, the money raised is enough for three years care but the person dies after a couple of months what happens to the balance of the money ??



    If it is after the person dies , which could potentially be anything up to 30 years after the person enters a care home, what is the status of the house in the meantime?
    Can it be lived in ?
    Can it be rented out ?
    Can it be renovated ?
    etc

    Thanks
     
  2. marionq

    marionq Registered User

    Apr 24, 2013
    5,848
    Female
    Scotland
    Assuming nobody else has a claim on the house then it is a source of capital or income for care. If renting out would cover that then there is no problem but if not then selling would be an option and this might require renovation. I believe there is a 12 week disregard after care begins in order to give time to sell the property. In some cases the money can also be deferred until the person dies or the house is finally sold.
     
  3. Dinwales

    Dinwales Registered User

    Jan 12, 2016
    3
    Who makes the decision about when the house is sold ?
     
  4. marionq

    marionq Registered User

    Apr 24, 2013
    5,848
    Female
    Scotland
    Whoever has Power of Attorney would be in a position to sell in order to pay the bill to the care home. The money would of course have to be banked in the name of the home owner and payments drawn from that until funds ran out.
     
  5. nitram

    nitram Registered User

    Apr 6, 2011
    19,021
    Male
    North Manchester
    "...if ,for example, the money raised is enough for three years care but the person dies after a couple of months what happens to the balance of the money ??"

    When the house is sold the proceeds belong to the person and are used to pay for care.

    Any funds remaining on the death of the person are part of their estate and are distributed according to their will or the rules of intestacy if there is no will.
     
  6. canary

    canary Registered User

    Feb 25, 2014
    10,525
    Female
    South coast
    Until a person dies the house, or money from its sale, belongs to them. The point is that once someone goes into a care home they have to pay for their care until they have less than £14,000, when the Local Authority will pay.
    No-one is forcing the sale, but the bill has to be paid. Usually this involves selling the house to raise the money to pay for the care home, but if renting would cover the cost, or there is alternative savings, the house does not have to be sold. If the care home would accept a deferred payment then it would not have to be sold until the person dies and any money left over would be inherited according to their will.
    Also, if certain category of people - eg a spouse, or someone with a disability - is living in the house it is not counted towards their ability to pay and would therefore not have to be sold.
     
  7. nitram

    nitram Registered User

    Apr 6, 2011
    19,021
    Male
    North Manchester
    "If the care home would accept a deferred payment..."

    It's not up to the care home it's up to the LA.

    It's a loan from the LA which is repaid, usually with interest, when the house is sold.
    If the person in the home does not have capacity the loan agreement has to be signed by an attorney or court deputy.
     
  8. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,439
    There seem to be a few misconceptions re deferred payment agreements. It's not up to the care home whether or not they will accept a deferred payment agreement: this is down to the LA and they must offer such an agreement if the property isn't one that is disregarded, and if there is actual value in the home, and the persons other savings are less that £23,250. Of course, such a deferred payment agreement may not be adequate to pay for care home bills. If you do decide to use the deferred payment agreement, in the event the person in care dies you have 90 days to repay the loan. Interest and setting up fees are likely to payable on such an agreement

    The 12 week property disregard only applies where the person entering care has less than the current upper limit of other savings, or when their savings drop to that upper level.

    To answer your points in order:

    This is really determined by the person in care's circumstances. If they have adequate income/savings from other sources, then the home does not have to be sold. If by renting the house out this would provide adequate funds, ditto. The thing to remember though, is that in order to sell the home/rent it out/obtain a deferred payment agreement someone will have to be legally able to act for the person in care - this is normally done via a Lasting Power of Attorney, but if one has not been set up, someone will have to apply to become a Deputy.


    The balance of the money forms part of the person in care's estate and would be distributed according to their will, if they have one, or via intestate provisions if they don't.


    This goes back to the whole: it's your call thing (or rather the person who holds the LPA/deputyship). If you have a deferred payment agreement, it makes sense that the property should be lived in, either by a family member or by a tenant, as you need to maintain the property and keep it insured etc and this is much easier when someone is living in it. As to renovations: you would need to keep careful records. Some people use their own funds for this, with the understanding that they will be repaid at the time the property is sold, others use some of the person in care's funds. It can be problematic though and generally I would say that if the property needs substantial renovations you might be better off simply selling it as is.

    This page talks about deferred payment agreements and other matters related to paying for care https://www.gov.uk/government/publi...hats-changing/care-and-support-whats-changing

    Also read this https://www.alzheimers.org.uk/site/scripts/documents_info.php?documentID=2710

    Edit : nitram got there first :)
     
  9. canary

    canary Registered User

    Feb 25, 2014
    10,525
    Female
    South coast
    My mistake. I asked about deferred payment when mum first went into her care home and got the impression that it was done through the care home.
     
  10. nitram

    nitram Registered User

    Apr 6, 2011
    19,021
    Male
    North Manchester
    Edit : nitram got there first

    But you took time to compress the whole lot into a nutshell!
     

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