How to logically explain to an 89 year old stubborn man not to give almost half a million to hiss adult grandchildren

[Rictasmorticia]

i have been approached my his DIL for help in how to explain to him why this is a bad idea.

He is a self made man, a widower and lives in luxury apartment on a complex with facilities . Presently he is almost fully independent but fears he may have the beginnings of dementia. 5 years ago, on the death of his wife he gave £100,000 to his DD and DS and £50,000 to each of his 4 GC. They were all in their 20s at the time and each of them have been extremely sensible with the money.

This money represents every thing he has except for the property. The son and daughter want him to keep the money for himself. Their view is that if he does need care it will buy him the very best.

He has always acted the Patriarch and thinks he knows best and can be quite pig headed.

What they are looking for is facts and figures that they can present to him.

It depends how much else he has and how much longer he intends to live surely?

Why is it a bad idea? It's his money, if he's got half a million he's not exactly on the breadline, why shouldn't he give it to his grandchildren?

Depends what the reasons are for not giving it to him. You haven't indicated why/whether it would be n unreasonable thing to do.

Well you should at least know why it’s a bad idea

does she want it for herself ?

On the surface it seems like a good idea. What's wrong with it?

Seems like a nice idea to me. Why not?

Who are you in this situation?

Why shouldn’t he? What else is he going to do with it?

Why's it a bad idea? He's 89 - time's a ticking!

Are the parents of the grandchildren wanting the money to be left to them?

https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/

you said he did this 5 years ago, I'm unclear what the issue is? they want to give it back?

Say he has 4 million. Giving away 500k still leads plenty for care fees and starts the clock ticking on IHT taper relief. So good idea.

If he has 600k only then giving away 500k is not a good plan and could lead to the deprivation of assets issue.

If he has some DC with GC and some without it could be unfair to those without.

It isn't clear cut.

She does not want the money for herself. Nor do his son or daughter. They have no objection to him leaving the money to the grandchildren in his will or giving a smaller amount. They think he is naive about how much a good care home will cost or the life expectancy of someone in such good health.

What I was hoping from this thread was some facts and figures about care home costs. There is also the tax implications. In that he might die when they have young families and it might be difficult for them to pay inheritance tax.

So he wants ot give more away and a high proportion? Not a good idea.

Care fees could be 2k per week.

If he gives it away and he does need care he’s got a good chance that it will be seen as deprivation of earnings if giving it away drops him below the assets threshold

from a tax perspective / if they assume that taxes could be due and not spend it all then they will be ok

from a care perspective/ same applies

he can give it and they can either save it all or spend at a slow rate and then if he does need it it’s there and if he doesn’t at least they get the interest

Why does the DIL think it's bad? Are they young and you think they would blow it all on crap? Or is she miffed at being left out of his will?
Why not suggest any potential monies are put in trust for them to use for a house deposit/further education or travel?

It sounds like he gave some away after his wife died 5 years ago, and now wants to give away more - pretty much all his liquid assets ?.

It's not really possible to say whether or not it's a good idea without knowing what his monthly income and expenses are like and if they are likely to change in the future - e.g. is he likely to need carers coming in ? What if the service charges for this luxury apartment rise steeply ?

Personally I'd be uncomfortable with all my assets being tied up in the property I live in and no money pot if needed to maintain it or me.....

He does not have 4 million. This money is all he has. The money he gave 5 years ago is a separate issue. I put that in to show how generous he has already been. His children and grandchildren don’t need any more and want him to keep it for his own needs.

I should add that all the people mentioned have very ordinary jobs and lives.
They are at a loss as to the right words to use to explain it to him.

That is exactly the answer. Explaining it to him is the issue.

He should budget about £90k per year for care. If he goes into care he probably won't be in for more than 2 years.

Giving the rest away would be a fabulous idea.

If he needed care, would this not be seen as deprivation of assets and the Government would come after everyone to pay it back?

Maybe use that argument.

If giving away this money still leaves the property that could be sold for care I don’t see the issue here, I assume the property would be sold if required?

But he has a house that could be sold to cover care fees? I don’t think he’s suggesting giving the house away, and if the equity in the house will cover care fees there’s no deprivation of assets.