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Protecting assets.

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Jaded'n'faded

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Jan 23, 2019
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High Peak
Is there any legal/legit way to do this? I don't object to the idea of people paying for their own care if they can afford it, but feel there should be limits and also that help such as CHC should be far easier to get. (I'm also aware the government is planning to make changes to funding but I don't hold out much hope for that.)

On another thread (No house but savings...) the poster's parents are having to pay for their care (at home) because they sold their house, put the money in the bank and now live in rented property. I believe I am right in thinking that if they hadn't sold the house but were still living there and needed care, it would be disregarded in a financial assessment and only their savings (which would be far less) would be counted. Presumably that would result in council contributions happening sooner. Assuming at least one of them remained there till death, the house would be 'saved'.

So what I'm trying to find out is, what's the best way to protect your assets? I live on my own and I'm in the process of buying my house (outright.) I won't have much left in savings (after I do up the kitchen and bathroom!) but I'm still working and don't have heavy outgoings. As I'm convinced I will one day get dementia (a lot of it in the family) I would like to do as much as I can to prepare for my future so that I can pass something on to my 2 children when I die. (Once the house sale is completed I'll be making a will - 50/50 each child and also doing my LPoA.)

As far as I know, you can give X amount per year away without penalty. And you can also give larger amounts away without penalty if you live for 6 years after that. (I'm honestly not sure of these details exactly so please correct me if I'm wrong!) If I do nothing and end up having to go and live in a care home, with not much in savings, my house would have to be sold and the money used to pay for my care. But what if I put my house in my children's names? Is that allowed? How long do the council go back when making a financial assessment? 6 years? 10 years? I would hate to lose my house unnecessarily and leave my kids with nothing.

I do realise that the main difference this would make for me is that my kids would have to go with the council choice of care home and not - maybe - a nicer, more expensive one. But to be honest, if I'm bad enough to need a CH, that probably doesn't matter. Of course, if I have enough warning and am not in complete denial, I'll spend my money on a trip to Dignitas instead...
 

My Mum's Daughter

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Feb 8, 2020
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I'm going to look into putting my house into my children's names. The chances are, my parents' house will be sold to pay care home fees and I'm determined to try to hang on to my own.
 

Jaded'n'faded

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Jan 23, 2019
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Exactly. Same with my mum. There must be some clever, legal ways to protect your assets!

But I'd want to stitch it up tightly. I don't want to find a myself in a situation where one (or both!) of my kids marries the spouse from hell, who manages to re-mortgage half of my house and runs off with the money, only for the mortgage company to come chasing me for it or force it to be sold from under me...!

OK, I have an active imagination. But I think you have to consider the worst possibilities. I've read so many horror stories on TP...
 

nitram

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Apr 6, 2011
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North Manchester
As far as I know, you can give X amount per year away without penalty.

There is not a limit on money given away if it is out excess income, paid on a regular basis, and does not adversely affect your standard of living.
See box 6 and page 8

But what if I put my house in my children's names? Is that allowed

No problem with deprivation of assets as long as it's done well before there are any signs that you might need care in the future.

Chattels are exempt on LA financial assessment although you might have difficulty proving that the Van Van Gough or vintage Rolls were not bought solely to make them exempt.
 

marionq

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Apr 24, 2013
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One of the snags with gifting half of your house now to your children is that if they were involved in a divorce your house would become part of the assets of that divorce.
 

Jaded'n'faded

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Jan 23, 2019
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One of the snags with gifting half of your house now to your children is that if they were involved in a divorce your house would become part of the assets of that divorce.
Yes - hence my worries about the spouse from hell, etc.

Would it work better if I kept a small share? Say 10% for me and 45% each for the kids. Would that help? Or put some sort of proviso on the gift. (Obv. that I will continue to live there for one thing. Don't want them charging me rent or turfing me out!)

There must be some way to do it and I am determined to find it. Would I ask my solicitor or is this financial advisor territory?
 

marionq

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Apr 24, 2013
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Leaving them a 50% share in your will for after you are dead is fine but putting that share in their names while you are alive is not. If they are on the Title deeds as part owners then that is when the asset could form part of a divorce settlement.
 

Jaded'n'faded

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Jan 23, 2019
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Thanks @marionq . I can see that gifting them the house while I'm alive is indeed asking for (possible) trouble. There must be some way I can protect it! Maybe I could re-mortgage it and give them the money. Hmmm. And I must look into trusts... Or maybe just find a way to prevent either of my kids from marrying! (Both in their 20s and single...currently.)

For anyone in the same boat, I'll report back if I find anything useful!
 

marionq

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Apr 24, 2013
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@Jaded'n'faded There is a partial way out. John and I were tenants in common leaving our halves of the property to each other for life and thereafter to our three daughters. John died at the end of 2019 so I have a life interest in his half as well as my own half. I can leave my half to anyone now or it can be taken as an asset if I ever need care but the girls will get Johns half whatever happens.

Not exactly right for your situation but it is a way of not losing everything for couples with dependants.
 

marionq

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Apr 24, 2013
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Thanks for that Nitram. Interesting but I don’t like the sound of it at all. My preference is to make sure my daughters have whatever assets we accumulated in our lifetime. They are comfortable at present but one daughter is already divorced and her pension is much reduced after trailing around the Middle East as her husbands job changed. He was able to continue with his pension but the jobs she had carried no pension. With hindsight of course she would have dealt with this years ago.
 

notsogooddtr

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Jul 2, 2011
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I have told my 4 children not to expect an inheritance as I plan to spend my money! We supported them through university and have helped them all financially but they are all adults now and need to stand on their own two feet
 

Lynmax

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Nov 1, 2016
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“There is not a limit on money given away if it is out excess income, paid on a regular basis, and does not adversely affect your standard of living.”

Nitram, what exactly does excess income mean? I would like to give some money to my three children now, I can afford it and they are all now buying houses with large mortgages. But I don’t have a high income, my money is mainly from investments and pensions funds which I drawdown lump sums as and when I choose to. I was wondering if investments and pension funds count as income.
 

Duggies-girl

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Sep 6, 2017
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@Lynmax dad used to give his grandchildren a small sum every now and then £500 each and a couple of time he gave me and my brother a cheque because he had too much money (his words) but I always made sure that he never went over the £3000 gift limit per year.

When I filled out the inheritance tax form (there was none to pay) I realised that he could have given away a lot more without any penalty. Whatever you have given away during the last 7 years before you die (minus the £3000) is just added to the total value of assets on death which were in dads case the house and his bank accounts and as long as the total is less than the inheritance tax threshold then it is okay to give away whatever you like. The threshold for a couple with the family home left to children is £1000,000 at the moment.

Excess income is income left over each month/year that you do not spend, as long as your savings remain intact, but as above unless you are really well off you can give away whatever you like, although please do check on this in case I am wrong.

Dad spent so little during his last years and I really wish that he had spent a lot more when he was still able to and I have decided that I do not want to die with a big sum of money in the bank, I have one son and I am going to help him out as much as possible.
 

Dimpsy

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Sep 2, 2019
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Isn't it funny how we look at life.
Mum and dad worked hard for their money and I want mum's money to be spent on her comfort on the last leg of her journey; if she lives a long and fruitful life, it's goodbye quarter of a million to the CH. Fine by me.
I don't like inherited wealth, can't see the pleasure in enjoying someone else's hard work.
And yet the money OH I have accumulated (not huge but comfortable) is for us to enjoy, but also to pass on as much as possible to our children. Who, in their turn, have said we must spend our money on us!
I can't equate it.
 

nitram

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Apr 6, 2011
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North Manchester
Nitram, what exactly does excess income mean?
If year on year after allowing for expenses like a new car your bank balance (including cash investment) increases you have excess income.
Your situation is the opposite of living above your means and going into debt.
Gifts should be 'regular' so best made by standing order.
IHT403 asks for details for the last 8 years
2021-07-09_073228.png
 
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SewHappy

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Feb 3, 2019
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Mum inherited when my stepfather died. It's money they both worked hard for. She now has a very good pot of money being used to pay her care home fees. The freedom the money gave us to pick the right care home, near us, is beyond value. I can get on with my life, visiting when allowed, knowing that mum is being loved, well cared for and is happy. Yes it would have been lovely to have some of their money when I was younger but now I don't have to argue with funders or social services about what is right for Mum.

I understand why you are trying to protect your assets and I do believe that the system for paying for care is wrong. However now I also see the benefits of mum having her own pot to pay for care.
 

Dunroamin

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May 5, 2019
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UK
Mum inherited when my stepfather died. It's money they both worked hard for. She now has a very good pot of money being used to pay her care home fees. The freedom the money gave us to pick the right care home, near us, is beyond value. I can get on with my life, visiting when allowed, knowing that mum is being loved, well cared for and is happy. Yes it would have been lovely to have some of their money when I was younger but now I don't have to argue with funders or social services about what is right for Mum.

I understand why you are trying to protect your assets and I do believe that the system for paying for care is wrong. However now I also see the benefits of mum having her own pot to pay for care.
Absolutely!
 

northumbrian_k

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Mar 2, 2017
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Newcastle
My wife's son is over 50, owns a house in outer London, has a good income and can afford private education for his daughter. I consider that my wife's assets should be used to meet her needs now rather than trying to save something so that he has an inheritance, which he wouldn't get until both my wife and I are dead.

I have heard of ways to protect key assets such as a house but suspect that these may need to be put in place long before there is any suggestion of dementia.
 
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Jaded'n'faded

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Jan 23, 2019
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My wife's son is over 50, owns a house in outer London, has a good income and can afford private education for his daughter. I consider that my wife's assets should be used to meet her needs now rather than trying to save something so that he has an inheritance, which he wouldn't get until both my wife and I are dead.

I have heard of ways to protect key assets such as a house but suspect that these may need to be put in place long before there is any suggestion of dementia.
@northumbrian_k I hope you're not suggesting...?

But seriously - does anyone know if they are 8 years from dementia? Also, it seems completely wrong to tell a person just diagnosed that they can't give their money away any longer. Other people are allowed to give their money away even if they get ill and die within a few years. It just seems so unfair. Obviously I'm talking about people who don't have huge amounts. But people with moderate means still want to pass some money on to their children. They should have the same rights as rich people.

My house is small and not worth much. My savings would probably not exceed the £23.500 upper limit for SS assistance. (Unless I win the lottery meantime.) My kids are poor and live in rubbish rented properties. I'd like to help them. I'm 61 and mum was 70-75 when she started with dementia. Maybe younger. So if it's going to happen to me I've got 10-15 years... Yes, I know I might not get it but I'd really like to make provision now if I can. Just in case.

Maybe I'll just give the kids my savings and insist on being cared for at home till my dying day. That could work. I intend to do an Advance Directive at the same time as my will and LPA. Perhaps if I put 'I refuse to be moved to a care home under any circumstances and wish to remain in my own home till I die' - would that carry any weight? Same with the H & W PoA. That would protect my house, wouldn't it?
 
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