Can they take equity out of the house.......

Discussion in 'Legal and financial issues' started by Goldilocks1947, Aug 4, 2015.

  1. Goldilocks1947

    Goldilocks1947 Registered User

    Jul 29, 2015
    8
    Hi everyone
    My husband was diagnosed with Vascular dementia with Alzheimers in 2011, we are fine at the moment, but I heard that if he does have to go into care, (I will do my utmost to make this not happen), then Social Services can take equity out of our property whilst I am still living there, is this right?
    Lots of kind thoughts and hugs to everyone.
     
  2. nitram

    nitram Registered User

    Apr 6, 2011
    19,233
    Male
    North Manchester
    No, whilst you remain resident in the property its value is disregarded in any financial assessment.

    Only funds in his sole name and half of any joint accounts are counted as capital
     
  3. 2jays

    2jays Registered User

    Jun 4, 2010
    11,598
    West Midlands
    H
    Sorry just a quickky as I'm rushing to go out

    NO they cannot take equity from your house. They should not even suggest it as that would be illegal

    xx


    Sent from my iPhone using Talking Point
     
  4. Pete R

    Pete R Registered User

    Jul 26, 2014
    2,045
    Staffs
    Normally NO they cannot as the property is disregarded because you live there.

    However if other capital is below £23250 and therefore LA funded but a top up is also required they have the discretion to offer a Deferred Payment Agreement. This may suit your circumstances and it might not but it is purely your choice and cannot be forced on you. :)
     
  5. rajahh

    rajahh Registered User

    Aug 29, 2008
    2,794
    Hertfordshire
    What if the property is in his sole name? Woukd that make a difference?
     
  6. nitram

    nitram Registered User

    Apr 6, 2011
    19,233
    Male
    North Manchester
    "What if the property is in his sole name? Woukd that make a difference?"

    No, it's the occupation by the spouse, amongst other categories, that causes the disregard.
     
  7. Goldilocks1947

    Goldilocks1947 Registered User

    Jul 29, 2015
    8
    Thank you for all your help, it seems that the answer is a categorical no! and to answer the last point above before Nitram, the property is in both our names, thank heavens. However, would I be able to take equity out of the property, I am worried that if I have to stop working, we may not be able to manage without my wages and taking equity may make a huge difference and allow me to stay at home with my husband.
    I have been looking at the Social Service website and it seems that you may have to prove that any financial arrangements that are made are not done to specifically deny Social Services access to potential contributions to care. The property was always going to be our Safety Net, and it seems as though it's being pulled from under our feet.
    Thank you once more everyone for your help, I don't feel quite so alone now.
     
  8. nitram

    nitram Registered User

    Apr 6, 2011
    19,233
    Male
    North Manchester
    #8 nitram, Aug 4, 2015
    Last edited: Aug 4, 2015
    "...the property is in both our names.... would I be able to take equity out of the property..."

    You need professional advice, however here are some things to think about.

    What you can legally do and what the LA may regard as deliberate deprivation of capital are not always the same.

    Is your joint ownership as joint tenants or tenants in common?

    Has your husband retained capacity?

    Does anybody have LPA?

    If you remain in the property the LA only becomes involved if you predecease him. Depending on the type of ownership, your will, and the terms of the equity release if one was taken out, some capital will be included in your husband's financial assessment which could well mean he becomes self funding for some time. During this time deprivation of capital would not be an issue.

    You need professional advice on what is possible and what could happen in the future, maybe not from a provider of equity release plans.
     
  9. Goldilocks1947

    Goldilocks1947 Registered User

    Jul 29, 2015
    8
    Thank you for your reply, I don't think we are tenants in common, just both own the property. My husband is still able to make decisions for himself and manages everything such as personal hygiene. I have LPA's for medical and financial issues for him. If we don't see a Financial Advisor, who else could we ask for professional advice?
     
  10. nitram

    nitram Registered User

    Apr 6, 2011
    19,233
    Male
    North Manchester
    I was thinking of the legalities if the property was owned as tenants in common and/or if your husband lacked capacity and suggesting a specialist solicitor not a financial advisor.

    If your husband has to go into residential care and his assessable capital, sole funds and half of joint funds, is over £23500 he will be self funding - out of his capital not yours - but the household income will not change.

    If his capital reduces below £23500 and the LA start contributing, his state pension and any benefits will effectively stop as will half of any private pension, the remaining half of private pension will be paid to you. He would also have to pay a tariff of £1/wk for every £250 that his capital was over £250.

    Any funds received as a result of equity release would be regarded as joint funds.

    I think it will have to be a financial advisor that you contact but how you find the correct one I don't know, personally I have never used one.

    My approach would be to produce spread sheets of likely future income and expenditure for various scenarios , do you know a trusted person who could do this for you as a starter?
     
  11. Pete R

    Pete R Registered User

    Jul 26, 2014
    2,045
    Staffs
    You really, really should seek professional advice. Equity release may not be the best way for you to get extra funds now. Also if an ER company have a charge on your house then that may well scupper your chances of the LA offering a DPA in the future should you or your husband need one.
     
  12. Goldilocks1947

    Goldilocks1947 Registered User

    Jul 29, 2015
    8
    Hi

    I am sorry but I am very new to all this, what is LA and ER and DPA, sorry for being such an idiot......
     
  13. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,438
    ER= equity release, LA= local authority ans DPA = deferred payment agreement (basically a loan to pay care home fees secured on a property).
     
  14. Pete R

    Pete R Registered User

    Jul 26, 2014
    2,045
    Staffs
  15. Goldilocks1947

    Goldilocks1947 Registered User

    Jul 29, 2015
    8
    Thank you, it's all a bit of a minefield.........
     
  16. Goldilocks1947

    Goldilocks1947 Registered User

    Jul 29, 2015
    8
     
  17. Pete R

    Pete R Registered User

    Jul 26, 2014
    2,045
    Staffs
    There is a test on Friday:D
     
  18. Goldilocks1947

    Goldilocks1947 Registered User

    Jul 29, 2015
    8
    Oh no, I was going to take Friday off, best get revising then......... :)
     
  19. Pickles53

    Pickles53 Registered User

    Feb 25, 2014
    2,475
    Radcliffe on Trent
    I'm not a fan of equity release especially if you are relatively young. The costs of the loan mount up to astronomical levels as the years go on and if you change your mind there are early repayment penalties as well. You may think you never want to move but you can't predict the future. A cousin of my OH took out a plan about 10 years ago (when she was 55) which she is now trying to get out of because she now wants and needs a much smaller property. She will struggle to afford this because of the amount required to redeem the loan.

    There are specialist independent financial advisers who have specific qualifications to advise on planning for care fees and so on. We found one through this website and she was very helpful in enabling us to think through our options for funding my mother's care. We paid £150 for the advice but it saved us a great deal more than that.

    http://www.payingforcare.org
     
  20. Goldilocks1947

    Goldilocks1947 Registered User

    Jul 29, 2015
    8
     

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