Moving into care - maximising funds

[Felixity]

Mum is in later stages of Alz and she going to have to go into a home soon (currently she has carers coming 4 times a day). Mum has some savings and owns her house, but total value is unlikely to be more than £150k.

First off, is there any point in thinking about getting an annuity or will the return be not much more than the fees of 'standard' level of care home, so the only one we'd be helping in the end is social services? Mum is 83, has chronic heart failure, asthma, incontinence, high blood pressure, one functioning kidney and fragile skin, so we're guessing that she'll need some sort of nursing care - although her health isn't as fragile as it sounds, it mostly just needs keeping an eye on to make sure any chest infections, etc are treated. Not sure when she was officially diagnosed with Alz, but its at least 8 yrs ago.

Second query is, assuming we will have to fully self fund mums care until her capital gets down to £23k, can we spend some of her savings doing her house up a bit to try and maximise the price it goes for? It's currently electric heating for example, but is connected to mains gas, so I'm sure antiquated storage heaters might block a sale. Plus a bit of sprucing up outside (sorting some fencing and rendering that's blown)? If we can do this, has anyone any ideas on what's worth doing?

Third query, when trying to sell the house to fund care, what happens in the meantime for paying care bills whilst mum is in care but the house hasn't sold?

Sorry for all the questions!

 

[LadyA]

Welcome, @Felixity , although as I'm not in the UK, i wouldn't know enough to answer your questions. I'm sure someone more familiar with the system there will be along to help shortly. In general though, from what I understand, Annuities can work out an expensive option.

 

[SnowWhite]

Personally I wouldnt bother spending money on your Mums house. Its a lot of hassle and more work for you and may not gain you any more money. We sold Mums house last summer as it was and got £25,000 MORE than the estate agent suggested! It had double glazing and oil heating and was clean and tidy but not decorated for many years, had old fashioned fireplaces and the tiniest bathroom you ever saw. None of that put the buyer off and I didnt need to negotiate at all.

Regarding paying bills in the meantime you can do deferred payments until the house sale goes through but they do charge interest.

 

[Pete R]

Hi Felixity and welcome to TP,

Yes you can use your Mum's money to update the house but no one can really say if it is worth it or not.

With regard to paying Care Home fees whilst the house is being sold depends on how much saving your Mum has without the house. If over £23,250 you are on your own, if under then you can ask the Local Authority for a Financial Assessment and a 12 week disregard where they will pay their normal rate to the CH for those 12 weeks (minus pensions/benefits) giving you time to sell. After those 12 weeks your Mum becomes a self funder.

 

[Louise7]

With regards to whether to spend money on the house or not to maximise a sale have you contacted some estate agents, as suggested in your previous thread? My Mum's house needs quite a lot of updating, with old storage heaters, and also needs a new bathroom & kitchen. Two estate agents have advised not to bother spending money on updating it as people like to 'put their own stamp on' when buying a property which needs renovating/updating. They advised that the money spent putting in new heating, repairs, decorating etc would not be recouped when selling and wouldn't make any difference to whether the house sold or not. Sprucing up the exterior a bit might help but obviously there are other factors to take into account such as location etc when considering saleability. Talk to some local estate agents and ask their advice before doing anything major.

 

[Shedrech]

I wouldn't bother with any work either, @Felixity
it was hard enough dealing with moving dad into his care home, then clearing and selling dad's house without also having to oversee any work to the property
there's no guarantee you will recoup the costs, and you won't get back the time, effort and energy
ask a realistic price and be prepared to take an offer - one member was fortunate; I had to bring the price down a lot, largely because it had been set too high at first, and that, I'm sure made some prospective viewers wonder what was going on

 

[SnowWhite]

I wouldn't bother with any work either, @Felixity
it was hard enough dealing with moving dad into his care home, then clearing and selling dad's house without also having to oversee any work to the property
there's no guarantee you will recoup the costs, and you won't get back the time, effort and energy
ask a realistic price and be prepared to take an offer - one member was fortunate; I had to bring the price down a lot, largely because it had been set too high at first, and that, I'm sure made some prospective viewers wonder what was going on

I WAS lucky Shedrech. i had 3 estate agents value Mums house and they all said the same. I wasnt in too much of a hurry so asked the chosen agent to put a £15,000 higher price on it. He said I would never get that but I stuck to my guns and said I could always come down if they didnt like tiny bathroom and old fireplaces. In the end We had about 10 viewers and was in a position where two buyers desperately wanted it so they had to put in their final bid and the one we accepted was £25k more than The agent said. Just shows what Estate Agents know!

As long as the house is clean and smells nice people can see it has potential. We made sure the lawns were cut and also the hedges apart from that we did nothing.

 

[Felixity]

Thanks all for the advice. We've had two agents look at the house, both gave it the same value, one said do nothing to it, the other said give it a lick of paint and recarpet it. Upshot is, we're going to get another estate agent out and go with the majority view.

Funding care worries me tho. Mum has about £30k savings, plus the house. What happens if we don't realise the cash from her property sale before her savings run out? I've looked online, but can't find any answers to this...

 

[Yellowduck]

You can enter into a deferred payment agreement with the council after the 12 week disregard period. They will pay the fees, and when the house is sold they will take back what they have paid and you can start paying yourself from the remaining funds.

In our case, the estate agent has confirmed that by spending £10k on the property, we could get £40-50k more for it. However, we will be spending about £5k to make it 'presentable' and then we are going to let it, as this will reduce the amount the council charge against the property to about £16k per year, and we expect the value of the property to rise by this over time......

You MAY wish to look at an immediate needs annuity once the property is sold. They will quote a price for the annuity which will cover the difference in your mums income from pensions, AA, etc and the home fees. The cost will depend on your mum s age and her health, and to put it bluntly, how long they predict she will live!

For example, if the shortfall is £20k per year, the cost of the annuity may be £80,000. To put it very simply, if she dies within first 2 years the annuity company 'wins' and if she lives 8 years 'you win'.

The advantage of this is that should she live for 10 years she can stay in the same home. If you self fund from savings and the money runs out, she will either have to move to a home that will accept the council rate, or you will need to pay the difference.....

Once you know the price you will get for the property, you may wish to get a quote for an annuity.

 

[Pete R]

........after the 12 week disregard period.

Since the PWD currently has savings over the upper threshold then they are not entitled to the 12 week disregard.

 

[jenniferpa]

And again, ditto to what Pete said. It used to be if you started out with savings over the upper limit, you could get the 12 week disregard when they dropped. Not anymore.