Care Costs

[taylorcat]

I wonder if someone could help.

Mum has Alzheimers. I know if my Dad signs his house over to me the Council will question the motives should the worst come to the worst and Mum has to go into care.

What has just occurred to me is since my son has special needs would my my Dad be able to sign his house over to my son and if the motives were questioned he would say he wanted his grandson who has special needs to have the house/money. This was indeed his plan when he bought the house.

If no one can help could you perhaps tell me who best to speak to about it.

Each of my parents have already left their half share to me so at worst the Council would only be able to take half minus £12,000. Is that right?

 

[jenniferpa]

It's a very complicated issue (well, you already know that) and your really need to speak either to the CAB, someone from the Lawcentre (http://www.lawcentres.org.uk/) or last, but by no means least, the AS Helpline.

I'm a bit confused about your points, though. Are you anticopating what might happen if your father dies? Because until that point, the value of the marital home is disregarded from the point of view of care cost calculations. I suspect (but have no proof) that a grandchild with special needs will be irrelevant UNLESS that grandchild is actually living in the house. Also, do you mean that each parent has left you their half share of the house in their wills?

Jennifer

 

[taylorcat]

Thanks, Nada, called the helpline who put me onto Alzheimers Scotland who weren't much help. The lady I spoke to referred to the 7 year rule (i.e. when putting property into someone else's name they go back 7 years). But she was unable to advise whether this 7 year rule still applied or not and said I would have to speak to a lawyer.

Yes, Jennifer I know they can't sell the house while my dad is still living in it but he bought the house with my son in mind thinking he would benefit from the money. We have spoken to a lawyer in the past and my dad has changed his will to leave me his half of the house and my mum changed hers to leave me her half. So all they can take at the moment (or when the house is sold) would be half minus £12,000

 

[Skye]

Hi Taylorcat

I'd forgotten you were in Scotland. As you know, Scottish law is slightly different from English. As far as I know, Alzheimer Scotland don't have a legal helpline.

You might bet some better advice if you ring your local branch of Alzscot -- thay won't give you legal advice, but will probably know of a solicitor who would understand your position. I know our branch has one who comes to give us talks.

Good luck,

 

[taylorcat]

Thank you all but it's just dawned on me, Mum won't be able to change her will now so there's no point. I would like to find out about the 7 year rule though. The lady said the Government were talking about changing it.

 

[mocha]

7 year rule

Dear Taylorcat,
Just read your latest post and put 7 yr rule into Google and it came up with a whole list of explanations. I haven't read them myself but will do when I have time.

Hope they help.

Aileen

 

[CraigC]

Hi TC,

Please take some legal advice on this (as many have mentioned). It is a grey area but there is a strong possibility that assets will be investigated if the care home fees are paid by the local authority and a house is in full or part ownership with the person in care. There are now strong rules on transferring assets to avoid paying care home fees.

It is a blooming lottery, but it is best to be very well informed about the worse case scenario. A solicitor who specialises in this area should be able to give you some initial advice or the CAB Scotland http://www.cas.org.uk/.

Kind Regards
Craig

 

[sue38]

7 year rule

I don't know the law in Scotland, but I think in England a lot of people think that the 7 year rule applies to transfer of assets when being assessed for care fees. It doesn't.

The 7 year rule relates to Inheritance Tax (IHT). Very basically any gifts you have made within the 7 years prior to your death are brought back in to your estate when calculating the size of your estate for IHT. If however you reserve a benefit from the gift (e.g. you give your house but continue to live there without paying a market rent) then the gift is not effective for IHT purposes.


Sue

 

[jenniferpa]

Sue has made a very important point here. As she says the 7 year rule (in England at any rate) relates to IHT. Now for all I know there are some LA's who are extrapolating from that when it comes to intentional deprivation of assets and care home fees. However, it would be logical to assume that if that is the case, they would be well with their rights to consider that the latter part of Sue post also applies: do you still have use of that asset? Because if you do, you haven't really given it away. I imagine this would come down to a court case becasue this is would just be the LA's interpretation of the rules.

Edited to add: I've just done a brief search and come up with 3 things that might be relvant to you. The first was from a firm of scottish solicitors indicating that even if a transfer was successful from the POV of IHT, the success of that transfer would be irrelevant from the POV of LA charging, and the other from a carers group indicating that there is no time limit on how far back an LA can go in order to decide if an asset has been inappropriately disposed of. The final item is a case bought before the ombudsman indicating that the LA were wrong to go back 9 years (!) to assess assets. The pertinent point though is that at the time, the person was well and had no antiicipation that they would require a care home. In that document there were indications that Scottish LA's were using anything from 7 to 2 years when making the assessment, but that each case needs to be decided on its merits.