ATBU to do all they can to avoid paying for their care in old age?(187 Posts)
Bit of a do in the village hall last night and we were sharing a table with a couple we only vaguely know. The conversation turned inevitably to the election and various hot issues.
The couple took early retirement and are in their 60s. They have already given their house to their DCs and pay them the going rate in rent. Plus they have made substantial trust funds for their DGCs. They give their DCs money towards their expenses, like a new car or home improvements. They are determined to have no savings or assets above the prescribed limit by the time they need care.
This is because the DW's father was in a nursing home for the last 3 years of his life which he had to pay for himself. In the next room was a man who bragged he was fully funded by the council. They found out the council only paid 2 thirds of what DF was paying so he was, in effect, subsidising this man as well as paying for himself.
I can see why they feel as they do, it's one thing to pay for yourself but quite another to pay for someone else as well.
They feel that in future everyone should have to take out insurance bonds in their 20s because either everyone should pay towards their care or no one should pay.
It was an interesting discussion. ATBU?
If they are paying the going rate of rent then presumably they have pensions. These will be taken into account for care. You can't just rock up and say "I've only got £10K" and then be collecting a £20K/yr pension. You would have to pay the £20K a year first.
Furthermore fil is in a home which takes mostly council-funded people. It is rock bottom. Rock Bottom. If you have been used to a certain lifestyle then to find yourself rubbing shoulders with people from all backgrounds and in a place smelling strongly of cabbage, then you might wish you had retained your money in order to pay for a more upmarket home. If you have advanced dementia, who cares, I suppose, but many people in homes are there because of strokes, Parkinsons, blindness etc etc.
Well, morally yes. In reality they are playing the system to ensure their lineage is looked after monetarily.
I worked in finance, and have come across this so many times. I worked with wealthy customers who set up trust funds, and assigned their homes to their dc. All their savings spent on their dc, buying new cars, holidays etc, just to get rid of the assets.
I don't blame them tbh.
You need enough savings to choose a decent care home in the first instance or else you'll end up in a shitty one. But I agree, not worth having too much.
I plan to do exactly this. Ds has asd and I need to be certain of what provision I can leave him after my death. Can't endure the the thought of him being left without because it's all been taken to pay for my care and I'm too incapacitated/dead to do anything for him.
The home is far from rock bottom. Ranked as outstanding in recent CQC inspection, it's in our village, so we all know it.
my mum has told me she is selling her house at 80 - giving me and my sister 'our share' and moving into rented accommodation - she wants us to have our inheritance - I want her to have decent care in her old age - she's being daft but I do get her point - she has worked and paid tax all her life so I guess she resent paying everything she has back
The reality is a lot of people with money will just get rid early. I don't know what the answer is but there does need to be an alternative.
watery no garuntee they'd get a place there though, even if it is in your village
ou might wish you had retained your money in order to pay for a more upmarket home
Money gives you scoices all thru life. I'd like to retain enough cash to be able ot make a choice of where I reside in my old age.
Ghosty that plan will only work if your dm lives for another 7 years after giving you the money, as we obviously hope she will.
We have several options of how we want ole age care to be funded:
1. state funded. (taxes need to go up, don;t see many people wanting to vote for that - especially old and richer people)
2. Self funded (doesn't look like anyone wants to self fun either....)
3. No provision, you get looked dafter by your family. (Don't see that working for most people, and what about people that don't have family)
Basically no one wants to pay for their old age car,k in any way #selfish
@ghostyslovesheets my mum has told me she is selling her house at 80 - giving me and my sister 'our share' and moving into rented accommodation - she wants us to have our inheritance
Your mum needs to be very careful that her actions won't be seen as deliberate deprivation of assets. That sort of thing can be unpicked quite easily as it is/was such a blindingly obvious ruse.
Probably worth spending the money on a good easily maintained bungalow and fully equipping it, getting a couple of lodgers in and sharing the care costs.
I really hate the "I've worked hard and paid tax/N.I. all my life" crap - unless you are in the top 2% of earners there's no way you've paid in anything close to what you'll take out in care fees.
Every time tax rises are suggested to pay for our increasing needs, people refuse. You get the services you are prepared to pay for.
Those care bonds are a good idea.
@Kennethwasmyfriend Ghosty that plan will only work if your dm lives for another 7 years after giving you the money, as we obviously hope she will.
Again, please don't believe everything after the magical 7 years will be scot-free:
"The myth of the 7 year rule
Many people hold the believe that if you transfer your assets and then survive for 7 years, this is not deliberate deprivation of assets. This so called ‘7 year rule’ is a complete myth. There is a 7 year rule that relates to inheritance tax but this is something different altogether.
The 7 year inheritance tax rule
If you gift something to another person and die within 7 years of making the gift, inheritance tax may be payable. This is tapered – so if you survive for less than 3 years the full 40% may be payable; 3-4 years = 32% , 4 to 5 years = 24%, 5 to 6 years = 16% and 6 – 7 years = 8%.
To be clear, the seven year inheritance tax rule is not related to deprivation of assets. As noted by the court in Yule v South Lanarkshire Council, the Local Authority can go back as far as they like when considering whether a gift transferred constitutes deliberate deprivation. Even a gift made 20 or 30 years ago could be considered."
They could end up like my MIL: with a condition that meant she could not have been found a state-funding nursing home within travelling distance of any member of her family, and which also meant the level of care provided by state-funded nursing home would have left her completely bed-bound for the last 8 years of her life.
MIL was a cheery old soul who could have rubbed shoulders with people from different backgrounds with no problem, but lying flat in bed for 8 years with no social stimulation because there is no money for the right hoist, let alone any social entertainment- that is a different matter.
As it was, cashing in her funds allowed her a nursing insurance plan which kept her comfortable and happy in the same friendly, well-run place for all those years; they were even happy for her to die there rather than go into hospital.
People suspected of hiding their assets are already charged full fees.
Let's hope when they rock up to the care home expecting free housing and care they're sent their weekly invoice anyway.
I have a real problem with this sort of behaviour. If you are lucky enough to have had the ability to work hard, be well paid and have assets at retirement, then you have the means to pay for care.
Some people work very hard all their life at jobs which are essential but badly paid and end up without the means to fund their care, shall we just let them die of neglect and not fund care for anyone?
Some people get free food from food banks. Shall we be jealous of them too and ask for free food for everyone? Any sensible person would realise that there will always be some people who need help through no fault of their own and not begrudge other people help that they do not need themselves. (And preferably by living as a society with a proper minimum wage and a functioning benefits system.)
The reason councils pay less than individuals is to do with economies of scale. If a council pays for 50% of the patients in a particular home, then of course it will get a discounted rate. If the home had to do without the guaranteed income from the council, it might not be open at all. Fully private nursing homes are much more expensive.
People need to realise that if they have done well in life, they have been lucky as well as hard working or talented. And they should count themselves very privileged indeed to be able to choose a care home; some are grim. When my parents get to the that stage, I would far rather they spent the money on themselves than on me or my children.
My parents were far from rich. When they retired they sold the house for £16k, (seemed a lot then) went on a few foreign holidays and rented a 'retirement' flat. Mum died at 77 (suddenly) and dad lived to 94, only needing 'care' for the last two. He refused to go into a home and my sister had a nervous breakdown after his death due to the stress of it all.
Yes, they admitted to playing the system and were life-long Tories if you can believe that BUT their young lives were ruined by WWII and all the hardship that went with it so I think that they felt that it was 'payback' time for them. Cynical, but can you really blame them?
I have stood outside some of the homes assigned to those with no assets or savings and cried at the thought of my loved ones being in such places. Very few may get lucky (but will be losing all their pension to fund it) but most get stuck in buildings that stink of urine and have yellow wallpaper from when they were able to smoke in there..
Excellent post categoric. I hope I don't turn into a miserly bitter scrounger when I get old
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