Equity Release As Gift After Dementia Diagnosis.

[paulsz22se]

My mother has recently been diagnosed with Vascular Dementia and Alzheimer’s and is currently living alone in her own house. She owns the house outright but does not have much in the way of savings.

She would like to equity release a sum from her house to gift to myself and my sister. I am struggling with the moral and possible legal implications of doing this (and I am aware equity release comes with its own issues).

Considering the legal implications for now, I would like to know if she would actually be allowed to do it or would it be seen as deprivation of assets at some later date when she may have to go into a home? Everything I read suggests local authorities are hot on this especially after a diagnosis. Would she even be able to equity release in the first place? Having been diagnosed now would she be considered of sound mind to be able to sign the documents?

Obviously, her worry is that all of her estate will go in care costs and she wants to leave something for us. Who could I talk to for this kind of financial advice?

 

[Violet Jane]

I think that it would be very difficult to avoid SS finding that this is a deliberate deprivation of assets.

 

[Grannie G]

Welcome to Dementia Talking Point.

Yes it would be considered a deprivation of assets @paulsz22se and really not worth the risk.

If you are still not sure you can contact Dementia Connect and they will tell you all you need to know.

Dementia Support Line

If you need dementia support, we’re here for you. Get personalised information, support and advice by calling us on 0333 150 3456.

www.alzheimers.org.uk

 

[Duggies-girl]

Equity release is generally a bad idea for most people. In your mothers case I think it could easily be viewed as deliberate deprivation. I would steer very clear of it.

 

[Jaded'n'faded]

Seems wrong, doesn't it? It's her money and she should be allowed to do what she wants with it. Unfortunately, Social Services would see it as deprivation of assets. Also, if you were to become her Attorney for Finance and Property, attorneys are not allowed to benefit financially from their position so there would be conflict there too. You should definitely sort out Power of Attorney for your mum, (perhaps jointly with your sister) as you'll need it to act for her/help her with money matters in the future, and it sounds as if she still has capacity to arrange this at the moment. (A diagnosis of dementia does not mean the person lacks capacity for such things.) You can do it online or via a solicitor.

Having said the above, much depends on the value of your mum's assets. If her house is worth three million and she wants to gift you and your sister £5,000 each, it really wouldn't be a problem. However, if the house was worth £100,000 and she wanted to give you £40,000 each, that would obviously be a different matter and would definitely be Dep. of Assets.

 

[Sarasa]

A welcome to Dementia Talking Point from me too @paulsz22se.
I wonder if your mum has been watching TV, there always seem to be loads of adverts about equity release along with happy looking people who have benefited from it. I could well imagine that putting the idea in your mum's head. As you've said there are problems with it and I do think social service would look on it as deprivation of assets at a later date, not to mention the hassle sorting things out if you need to sell her house if she does move to a care home.
This is the link to the Lasting Power of Attorney forms, in case you haven't seen them. When we sorted it out for mum we used her solicitor as that made her feel happier about the whole process, but you don't have to. My brother and I can act jointly or severally, though in practice it's always me that does things. Getting LPA doesn't mean your mum can't continue to manage her own financial affairs, but it makes it will make things so much easier if she starts to struggle with things.
Now you are here, do have a look around. This is a very friendly place and you'll get loads of help and advice here.

 

[paulsz22se]

Thanks for your help everyone, this does confirm my thoughts.
My sister does actually have LPA which we sorted out about 6 months ago when we started to suspect there was an issue. She lives very near mum which is why she has it. Obviously, she would benefit so that would be bad.
Unfortunatly, things appear to be progressing quite quickly which is why we are having to think about such things.
Thanks for the welcome as well.