Own house with mum. Do we need to sell for care if we bought less than 7 years ago?

[AmandaW]

Hi everyone. Newbie here ??

my mum is as yet I diagnosed but will be very soon. We have recently sold ours and mums house and bought a bigger one for us to live in together. She is left with around £30k cash and her share of this house. When the point comes that she needs to go into care, would we have to sell the house to release her equity? Our solicitor is arranging a trust for the shares but as it won’t be 7 years prior to her care, I suspect we may need to sell?

 

[nitram]

If you are over 60 or disabled at the time of the financial assessment by the LA the house will be disregarded, else the LA will insist the house is sold to pay for care.
There is slight chance that this may change when the Care Act is amended defining new capital limits.

Make sure that the solicitor's intention is to prevent the capital being included in any LA financial assessment and not just related to Inheritance Tax.

Defining capital

What is capital?
5) Capital can mean many different things and the intention is not to give a definitive definition here as a local authority will need to consult the regulations and consider the individual asset on its merits. In general it refers to financial resources available for use and tends to be from sources that are considered more durable than money in the sense that they can generate a return.

6) The following list gives examples of capital. This list is intended as a guide and is not exhaustive:
......
......
h) trust funds

https://www.gov.uk/government/publi...ce/care-and-support-statutory-guidance#AnnexB .

Above is guidance not law, trusts are extremely complicated, the solicitor may have devised a method of using a trust fund under specific circumstances.

The LA may well argue that money was transferred when it was known that your mum was likely to need care in the near future and treat the transfer as deliberate deprivation of capital adding the amount as virtual capital to the assessment.

 

[MartinWL]

I don't think you can be forced to sell a house in which a close relative lives. Others will confirm. I do wonder if your mother might be accused of deliberate deprivation of assets. The Council might suggest that you should pay her rent for her part of the house once she ceases to reside in it.

 

[canary]

I don't think you can be forced to sell a house in which a close relative lives

Unfortunately the LA can indeed insist. Nitram has given a good summery of the situation.

 

[jugglingmum]

7 years sounds like inheritance tax not deprivation of assets.

As others have said you are likely to have an issue with the trust being created once your mum already has symptoms

 

[ScaredyCat]

I looked into this a few months ago. It actually all depends on the LA. Firstly, you bought the new house before your mother was diagnosed. There are rules they follow which are open to interpretation. This includes means testing for when carers are needed at home. I used to work for Housing benefit so can totally understand a means tested benefit but could not find the information I needed anywhere to make a care fund assessment myself.
At a guess, worse case scenario is that they take the funds from your mum's share of the property when you either move or die yourselves.
However, having said this, it could be years before your mother needs to go into a care home and, no doubt rules will have changed by then, probably for the worse.

 

[Cazcaz]

Hi everyone. Newbie here ??

my mum is as yet I diagnosed but will be very soon. We have recently sold ours and mums house and bought a bigger one for us to live in together. She is left with around £30k cash and her share of this house. When the point comes that she needs to go into care, would we have to sell the house to release her equity? Our solicitor is arranging a trust for the shares but as it won’t be 7 years prior to her care, I suspect we may need to sell?

The 7 years is to do with inheritance tax only. There is no time limit when it comes to paying for care, the LA can look as far back as they wish.

There is a good chance the trust will be viewed as deprivation of assets, so will be claimed by the LA to pay for her care.

Depending on your age and if you are claiming any disability type benefits, the house may or may not be disregarded in the assessment of what is owed by your mother. If it is not disregarded, the LA will probably claim the value of 50% of the house, which would mean selling straight away or arranging a kind of deferment which would mean the money was due when she passes away.

I hope this helps.

 

[Palerider]

There are a number of factors involved here, but right now don't sell the property as that would liquidise the asset and make things easier for the LA to take care fees, because you then have no grounds for asking for a discretionary disregard (which you can ask for).

I would go back to your solicitor to whom you are paying fees to for the instructions you have given and ask them the best way forward, if they can't advise then there are other firms who work in this area and perhaps you might need to negotiate that your current legal represenation stops any further work and transfer your instructions to another legal firm that can deal with this. Wherever you go make sure they are regulated if you make that decision.

Only you can ask for a discretionary disregard, remembering that if it is granted it is for you to live there and you can't sell it. Some LA's will only grant 12 weeks disregard depending on how they interpret the law, others will discretionary disregard beyond 12 weeks.

I do have colleagues that have signed their properties over to their NOK, but to be honest I have no idea on what basis they did that -you would have to seek more specialist advice

 

[MartinWL]

Unfortunately the LA can indeed insist. Nitram has given a good summery of the situation.

I stand corrected, the house is only protected if the close relative is over 60.

 

[Palerider]

I stand corrected, the house is only protected if the close relative is over 60.

Sorry I don't wish to split hairs, but if the LA also give a disceretionary disregard beyond twelve weeks then the same applies, but either way if mandatory disregard or discretionary disregard selling the property opens up another can of worms if the person in care is still living

 

[joan0606]

Hello, unfortunately as previously mentioned if you are under 60 and not disabled then the house wouldn’t be mandatory disregarded. However, as this house is your main residence the LA couldn’t force you to sell your shares in the house so they would then explore the ‘market value’ of your Mother’s share. Your mother’s share is very likely to be of ‘nil value’ as hypothetically no one could want to buy a percentage of your house and therefore, they could not include this in her financial assessment as capital. This is called ‘trust purpose’ and relates to the ‘Palfrey Case’. Have a look at Age UK’s fact sheet 38 page 12 for more information regarding joint ownership in property

I would make this knowledge aware to the LA when the times comes and certainly seek paid legal advice if needed as it could save a lot of hassle and money in the long run. I wouldn’t worry about setting up a trust as if she is currently showing signs of memory loss then they would definitely regard her shares as deprivation of assets regardless of a trust in place or not.

 

[Jerseygirl]

Hi. I am in the same situation as Mum and I own a house together, her the smaller sHare luckily. Council have given the 'market value' as £46,000 approx, being 10% less only due to the fact I would not sell my share (I did put to them it should be nil) Council told me it's normal to reduce the share by 10% in such situations. My next step is applying to a Discretionary Disregard panel once I have my statement and evidence sorted. I am not holding out hope but hopefully I have a good case: I came back to the UK in 2013 from my established life in New Zealand having gained citizenship (4 yrs before her Dementia diagnosis), to look after her as getting older, she had a one bedroom bungalow only and, as she had nobody and anxious living on her own, we bought together so I could give full support as she got older. I gave up my mortgage and nice home in NZ, much better salary, and my NZ pension scheme, I now look after her 24 hrs on my own (due to national carer shortage though a good Direct Payment carer package for the home previously), I do absolutely everything day and night and now reducing my hours again (working from home) so I would never get back on the mortgage ladder at my age now with my reduced hours. If she went into a care home in the future, after the £23,250 before funding, would leave approx £23,000 for us to fully fund before Social Services. This would last only 6 months anyway so me continuing to look after mum for years is saving the LA so much. Whether they will take all this into consideration at the panel we will see!

 

[Cazcaz]

I would never get back on the mortgage ladder at my age now with my reduced hours. If she went into a care home in the future, after the £23,250 before funding, would leave approx £23,000 for us to fully fund before Social Services. This would last only 6 months anyway so me continuing to look after mum for years is saving the LA so much. Whether they will take all this into consideration at the panel we will see!

Please forgive the question, how old are you? Are you in a position to find somewhere else to live if needed?

 

[Jerseygirl]

Please forgive the question, how old are you? Are you in a position to find somewhere else to live if needed?

Hi Cazcaz, I am 50 and gave up my mortgage in 2013. My share of the house is approx £110,000, which would mean I would be lucky to get a one bedroom flat in my area (yorkshire) , so Discretionary Disregard panel may say 'oh well you won't be homeless'. We will see. I have given up such a lot, which of course happy to do to look after mum. But won't get my hopes up with the LA.

 

[Cazcaz]

Tha

Hi Cazcaz, I am 50 and gave up my mortgage in 2013. My share of the house is approx £110,000, which would mean I would be lucky to get a one bedroom flat in my area (yorkshire) , so Discretionary Disregard panel may say 'oh well you won't be homeless'. We will see. I have given up such a lot, which of course happy to do to look after mum. But won't get my hopes up with the LA.

Thank you. Mandatory disregard would apply at 60, or if you were disabled.
I hope you find a way through this!

 

[Jerseygirl]

Tha

Thank you. Mandatory disregard would apply at 60, or if you were disabled.
I hope you find a way through this!

Thanks Cazcaz.

 

[Jerseygirl]

Just updating on my previous posts in this thread. I have just heard that our Authority have accepted my application for our Joint Owned House (with mum who has dementIa- I am aged 50) to have Discretionary Disregard should she need a care home in the future. I cannot tell you what a weight off my mind knowing the house is safe.

 

[Sarasa]

@Jerseygirl that is good news.

 

[Jerseygirl]

@Jerseygirl that is good news.

Thanks @Sarasa

 

[wilko73]

Just updating on my previous posts in this thread. I have just heard that our Authority have accepted my application for our Joint Owned House (with mum who has dementIa- I am aged 50) to have Discretionary Disregard should she need a care home in the future. I cannot tell you what a weight off my mind knowing the house is safe.

Hi that was great news,was it a long process involving lots of form filling and paperwork and interviews to manage to win your discretionary disregard?