1. Tubbsy

    Tubbsy Registered User

    Sep 5, 2010
    108
    Surrey
    My mum is in a care home (and very happy) so I am in the process of selling her house for her. She has stated on many occasions to myself and my brother that she would like to give us both some money (she has moments of clarity), but I am really worried about sorting this out. Does anyone know if there is a way, legally of course, that we could arrange this? I wondered if I contacted a solicitor to draw up a letter and could get her to sign it, would that be allowed? Any advice/suggestions gratefully received.
     
  2. rajahh

    rajahh Registered User

    Aug 29, 2008
    2,794
    Hertfordshire
    I doubt that . It wouldbe classed as a deprivation of assets.
     
  3. marionq

    marionq Registered User

    Apr 24, 2013
    5,883
    Female
    Scotland
    When your mother eventually dies presumably you and your brother are heirs? That is the time to take what is left - if anything. While she is paying for care you can't really deprive her of her assets.
     
  4. Trini

    Trini Registered User

    Dec 7, 2015
    39
    Anything you take now will be classed as a gift and you will have to pay inheritance tax on it after she passes away if she does not survive for seven years assuming her estate is over the IHT threshold. The limit for annual gifts is £3000 pa with no IHT implication.
     
  5. rajahh

    rajahh Registered User

    Aug 29, 2008
    2,794
    Hertfordshire
    Small gifts are allowed if there is a record of them being made regularly like birthdays Christmas but otherwise they would still be classed as deprivation of assets. Once someone is in a care home their money is to be used for their care only[/U]
     
  6. lemonjuice

    lemonjuice Registered User

    Jun 15, 2016
    1,535
    England
    I agree it is now much too late for your mother to give anything to you or your brother during her lifetime.

    My understanding of the £3000 'gift' per year is that they are only valid for grandchildren, not children? Anyone else know different?
    Plus any gifts will still be treated as 'deprivation of assets' and I believe they can ask for information going back even longer than the usual 7 years.Would you want your children to have to pay back money in the future which they may then no longer have?

    When my mother's grandchildren got married, I didn't even feel it appropriate to give them a one-off gift as the solicitor had said no more than £20.
     
  7. Trini

    Trini Registered User

    Dec 7, 2015
    39
    The £3000 is to anybody but I agree it can still be classed as deprivation of assets and if HMIT get any sniff if that they will go back more than 7 years. This happened to a friend of mine recently.
     
  8. Tubbsy

    Tubbsy Registered User

    Sep 5, 2010
    108
    Surrey
    Thanks for all your comments. My mother is in a fortunate position of having enough savings to last about 2 years in the care home and the money from the house sale would last more than 10 years amd she's had alzheimers for about 6-7 years already, so it's highly unlikely it would even need to be touched to pay for her care. So would it still be deprivation of assets if she gave us some now? I realise we would still have to pay inheritance tax on anything.
     
  9. rajahh

    rajahh Registered User

    Aug 29, 2008
    2,794
    Hertfordshire
    It has been known for dementia sufferers to live for many years. Care costs will go up, if there came a time when the money was getting below £23500 then yes there would be a deprivation of assets .

    You would have to repay the amount given earlier.

    So you could not really spend it without making provision to repay if necessary.
     
  10. Tubbsy

    Tubbsy Registered User

    Sep 5, 2010
    108
    Surrey
    Thanks rajahh, we're not talking a big amount for either of us, about 2% of her financial assets in total. I think I should maybe consult a solicitor about it as don't want to do the wrong thing.
     
  11. Katrine

    Katrine Registered User

    Jan 20, 2011
    2,839
    England
    My suggestion is to look at the best ways to invest her house sale money. Nothing pays much interest nowadays but when the money isn't needed soon you can put it into longer-term savings that pay better. You could also consider buying a policy that will pay her CH fees. These are a gamble because if the policyholder dies early then the financial provider wins, but if the policyholder survives for longer then they get the benefit of guaranteed payments. Financial advisors who are members of SOLLA (Society of Later Life Advisors) are the experts in advising on the various options.

    TBH, if it was me I wouldn't seek to obtain a gift at this stage. As others have said, small amounts in line with previous gifts would be OK, and if you have any evidence of your mum's long-standing intention to make a specific gift you might have this approved by the OPG. Examples would be: wedding, birth or coming of age of grandchild, once in a lifetime holiday or visit to close relatives overseas. I don't think it is sufficient to say that your mum wants to do it. She's not in a position to understand her overall finances. People often want to make gifts so that the government or other authorities don't get it all, but that's precisely why there are rules about deprivation of assets.

    My mum, in a paranoid frame of mind, did everything she could to bar me from having anything to do with her finances, and changed her will to leave me the minimum mandated by Scottish law. Then 2 years later she decided I was no longer a bad person and wanted to change her will to leave me her house. I didn't want this, but my brother tried to progress it, only to find that she was deemed incapax and couldn't change her will. It is what it is.

    Not to make any judgment about your own family Tubbsy, because I don't know the circumstances, but IMHO if parents want to give money to their children they should do it while they are still hale and hearty. Waiting until they are already needing to pay for care shows that they either don't understand their financial needs, or they do but are expecting someone else to pay if the money runs out.
     
  12. Tubbsy

    Tubbsy Registered User

    Sep 5, 2010
    108
    Surrey
    Thank you Katrine, a very useful reply. I am planning to get a financial advisor to invest the money one way or another. I agree with you, it would have been better/easier if she'd given us some money when she still had full capacity but she didn't, so we can't change that. I can't prove that she wants to give us any now either, only that she keeps saying it to my brother and I separately. She doesn't know how much she will have as she doesn't know how much I'm selling the house for but it is a lot of money, 20 years worth of care home fees I've worked out since staring this thread. I think I'll contact a solicitor/financial adviser who are experts in the subject and probably the opg too. Thanks for your help :)
     
  13. Beate

    Beate Registered User

    May 21, 2014
    11,725
    Female
    London
    Two questions: Do you need the money right now? Are you going to inherit it someday? If you are and you can manage without it, then why not wait? Then you'll be above reproach. You don't have to fulfil the wishes of a person who's not in full control of her finances anymore. Her care should come first.
     
  14. Tubbsy

    Tubbsy Registered User

    Sep 5, 2010
    108
    Surrey
    Of course her care comes first but if she has expressed a wish to give us some money now, I don't see why I shouldn't see if I can arrange it. My brother really needs it and it would be useful to me (as to anyone) and as I said before, we're talking about a lot of money, more than she will need to cover her care costs, but a tiny percentage for us to have now.
     
  15. jaymor

    jaymor Volunteer Moderator

    Jul 14, 2006
    12,513
    Female
    England
    On the Gov.uk site it states-

    When you act for someone as attorney holding the LPA it states under the heading ' making gifts - You can't make profits or benefit personally from acting for the donor, it is against the law.
     
  16. lemonjuice

    lemonjuice Registered User

    Jun 15, 2016
    1,535
    England
    Just a small warning when you say you have enough to cover 20 years of fees. My own mother's fees have risen 50% in the past 4 years she's been at her Home. 2 years ago we had a 27% rise , due to her 'higher level of needs' . Then with a 10% rise this year of that increased amount and always the shortfall coming out of her ' 'savings', that amount we deemed would last is decreasing at an alarming rate.

    They can last a remarkable length of time even at the 'terminal phase'. My aunt lasted 6 years at that stage and Mum's over 2 years now.

    Seriously I would wait and hope your brother can do what you believe your mother wants when your mother does eventually die. Then you won't have to be justifying yourself in the future and having to pay back money which the Office of the Court of Protection think you should not have given yourself.
     
  17. Tubbsy

    Tubbsy Registered User

    Sep 5, 2010
    108
    Surrey
    I still plan to contact a solicitor and financial advisor about it, just in case. Thanks anyway though.
     
  18. tigerlady

    tigerlady Registered User

    Nov 29, 2015
    427
    When my mother went into a care home she had 12 weeks free before she had to self fund, and then she had some savings to start her off before we sold her house. At that time we invested the money getting about 7% for a 2 year bond (seems massive now doesnt it! - wish we'd took out a longer term) and the interest from that and her pension and her attendance allowance just about paid for the fees. However when interest rates started to go down we looked at other options. We took out an annuity for deferred for 3 years, and after 3 years it would pay all her care home fees with an increase each year, as we calculated that after 3 years we would have to start using her capital, and then it would go down rapidly. It was also cheaper to buy the deferred annuity as the insurance companies gamble that the person will die before they have to pay out.

    As it happened, she did die before the annuity kicked in, but it was worth the cost just for the peace of mind knowing her money would never run out, and that she could, if she wished, give gifts to me and my brother and sister or her grand-children. I think the company we used doesnt operate any more but the SOLLA organisation that Katrine suggests would be a good place for advice. You have to work out if its worth "losing" some money to protect the rest and guarantee future care home payments
     
  19. Tubbsy

    Tubbsy Registered User

    Sep 5, 2010
    108
    Surrey
    #19 Tubbsy, Jun 27, 2016
    Last edited: Jun 27, 2016
    Thats really helpful, thank you Tigerlady. It seems a financial advisor will be the best place to start. When you say she could, if she wished, give gifts to me .......', do you mean while she was alive and did ou have PoA? Thanks again.
     
  20. Tubbsy

    Tubbsy Registered User

    Sep 5, 2010
    108
    Surrey
    Thanks lemon juice - 50% increase in 4 years, that's crazy and certainly something to consider. Hopefully we can invest the money so that any interest (pah, interest, what's that?!) might cover some payments in years to come. We wouldn't go ahead and give ourselves any money without approval from the powers that be but I will definitely near in mind what you've said. Thanks again, :)
     

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