Do I understand Joint Savings ??
Hi Ashburton.
I agree with Jennifer. You are likely to have problems with the local authority if you have JOINT savings and investments. (If the house is in joint names, or belongs to your mum, that is something else.) By joint I mean like in a bank account where either person can draw out, or shares where they have been bought, or inherited, in joint names.
Unless your mother is very rich I think you need to take advice about your JOINT savings at once. My understanding is that Social Services will assume that HALF what is in your JOINT savings account/investments will ALWAYS belong to your mum.
To try and clearly illustrate the point of how I believe savings are allocated I have assumed you and mum have no yearly income. (Any income you have just makes the situation worse).
Your mum’s nursing home will charge say £50,000 a year. (I am making no allowance for the yearly increase for inflation).
To illustrate the point I assume you and mum have JOINT savings/investments of £400,000. (This is just a nice round figure).
From the £400,000 I believe Social Services will assume HALF is your mothers, so she has £200,000 available to pay for her care in year one.
By year four your mum will have paid £200,000 for her care and the amount left in the joint bank account is also £200,000. (£400,000 less 4 years at £50,000 = £200,000)
Half the £200,000 is yours and HALF belongs to your mum. (Not £400,000 yours and none for your mum as you might expect.)
This means mum’s HALF of the bank account still has £100,000 left to pay for care and there is only £100,000 left in your half of the bank account.
After six years your mum will have paid £300,000 for her care and there will be £100,000 left in the bank. (£400,000 less 6 years at £50,000 = £100,000). Half the £100,000 in the joint bank account belongs to your mum and will be used to pay for the Nursing Home in year seven.
At the start of year eight there is £50,000 left in the bank.
At this point I believe Social Services expect the joint account to be run down until your mum’s half is left with £21,000 which (I believe) is still the savings limit after which mum does not have to pay anymore. You are left with your half of the savings, which must also be £21,000 and not the £200,000 you believed was yours when mum went into the Nursing Home.
In reality both you and mum will have some income each year, and so the money will last longer. (Half anything you pay in becomes your mums !)
But you have no idea how long your mum may stay in the Nursing Home. It could be many years.
Hope I haven’t misunderstood what you were asking. (I think IHT is the least of your concerns !!)
The whole subject is very very complicated so you do need professional advice.
Please don’t leave it until your mum reaches the next stage before you split up your savings.
Best wishes
Clive