Putting house into trust to avoid care home fees

[Winterday1991]

A friend mentioned that her parents had put their property into trust to avoid potential care home fees liability. Is this as simple as she suggests? Would this not be classed as deprivation of assets by the council?

This.

No one should be any under any illusion that SSD will cheerfully find a home and pay for it.

If someone is in hospital, it's slightly easier, but councils, otherwise, will back off, even when confronted by someone that obviously needs full time care.

Anyone self funding will have a much easier time - and a much better choice of home.

People also don’t understand that there can be a large tax charge on every 10 year anniversary of a trust.

And the thing is, those people ARE in the poor house as they're in council funded care homes which really aren't lovely places to live.

There's this weird attitude or idea that people who failed to plan for their old age must've been pissing all their money down the drain on luxuries for decades and then get to live the high life in state-funded care homes.

That really isn't what happens.

You see the attitude all the time on MN where people "worked hard" for their house and savings and therefore should be given some kind of special permission to not have to spend any of it in times of need and the state should step in.

When alot of people have worked hard but many couldn't get on the housing ladder or accrue savings.

You saw A LOT of it on MN during covid when people lost their jobs who had tens of thousands of pounds in savings they'd earmarked for a house deposit, new cars, extensions or whatever. Who thought it was completely unfair that they couldn't claim state benefits with tens of thousands of savings in the bank because they'd worked hard and made sacrifices. And presumably the people who didn't have lots of savings and were eligible for benefits, had been arseing around instead so it was unfair.

In the last few days I've read people suggesting someone paying more of their £70k salary into their pension to get tax payer cash via child benefit.
I've seen someone with household income of £130k want tax payers to pay for Nursery.
Now here on MN there's homeowner's trying to fudge systems to hide assets so tax payers can pay £1000 a week for their elderly care.

....and yet it's somehow Mrs Jones from No34 who suffers Bipolar that is the drain on the taxpayer for getting £340 a month because she struggles to work or it's the disabled mum that needs her rent and food money sanctioning because she's a scrounger...

The wealthy and comfortable feel entitled to the pot that's designed to help the poor and they get angry and jealous when the poorest of society barely exist through cold and hunger.

@Hufflypuffly123 , AFAIK there are precious few council run/funded care homes any more anyway.

My DM was in a dementia-only CH that took both self funded and council funded residents. I don’t know the proportions, but I’d guess it was about 50/50. Of course the self funders subsidised the others, but it was a lovely CH and we had no problem with that.

It was a non-profit making Abbeyfield care home.

When my Mum became very ill with cancer and given 6 months to live my sister's and I made a rota to care for her sleeping in her home with her so 2 sisters were available 24/7 for her. Each sister did 2 days on 1 day off. We didn't want her to have to spend her last months in a hospice and be upset about selling her house. As it happens she died after 11 weeks. What I do think is very unfair is that some nursing homes charge council clients and privately funded clients very different rates for identical care so private clients paying for themselves is one thing but they shouldn't have to subsidise the council clients. They have already done that once by paying years of taxes.

Completely agree

There is a separate rate for state funded residents and self funding residents. Self funders pay roughly 3 times as much because that is the only way to fund the actual cost for the state funded beds.
The only other way to do it would be for everyone to pay more tax and nobody wants to do that.
It isn't surprising that there is resentment over fees because the system is fundamentally unfair, but I can't see how else it can work. IME the care isn't that good in a lot of homes, despite the enormous cost.

It’s well dodgy. My parents were advised to do this by some cowboy solicitor for the sum of several thousand pounds. I went to see a reputable firm and they said nope, it’s most likely to be seen as deliberate deprivation of assets.

If you are relying on LA funding you are not only putting yourself at the mercy of their choice of home but also the timing. The LA will only find it when there is no other option so you may be stuck at home with incontinence pads only seeing anyone on your (rushed) 4 x a day care visits with no help or company in between until you reach a crisis. Maybe until you are so forgetful you nearly burn the house down, or you fall and are lying there overnight until the morning carers come. When if you were self funding you could choose to go to a home for company and to have the comfort of knowing you don't have to wait for help.

To be frank, I think the care system in this country (if you can call it that) is not fit for purpose. The cost of care is extremely expensive, and the level of service that is provided seems to vary wildly, which acts as an incentive for some parents to seek to protect their assets to pass on to their children. I think most of us can understand that, after what is often a lifetime of work, some parents want to ensure their children are able to benefit from the fruits of their labour, whatever our personal perspective on it might be.

My MIL is in a home in Ireland. The system there is very different and seems fairer to me. Whilst Ireland doesn't have an NHS, so it might cost 50 euros for a doctor's appointment for example, they do seem to heavily subsidise the cost of care, and base that subsidy on the level of assets and income. As I understand it, they will take a charge over a main residential house up to a maximum amount which is calculated based on the value of the asset/ level of income, and capped at 3 years - in my MIL's case it is capped at about 10,000 euros, which is not nothing but not completely astronomical. Once the cap is reached, that's it, and the state covers the rest. The money needs to be paid on death, which admittedly may require the sale of the house in some circumstances, but there should always be something left over for those who the deceased wished to inherit. It's not totally dissimilar to the scheme proposed by Theresa May as I understand it, which there was uproar about and which was dubbed the dementia tax.

I can't see much changing until after the election unfortunately.

Bear in mind though that if you go through the council you will have to go where they put you go into a very different home than if you use your own money where you have a choice of where you go and can receive better care.

I don’t understand this ‘us vs them’ attitude from either side.

You do realise that the people you describe in the first 2 paragraphs are the tax payers? Aside from the fact that, depending on personal circumstances, 70k income may not be that much in this cost of living crisis, that person putting more into their pension pot means they’ll have something to fund their care in old age.

Also, with £130k household income they may qualify for tax free child care (2k per year). Are you suggesting they shouldn’t use it considering their yearly childcare cost is probably 6 times that to allow them to work and earn those wages? Who would then pay taxes that provide free childcare for children from low income families?

Lots of people work hard, some earn less some more because of different reasons. But while some may get some benefits to top up their earnings, others have to pay for everything themselves. In the end both might have a very similar lifestyle. Which is fine as long as both have a roof over their heads and food on the table. But why all this infighting?

The truly wealthy and comfortable don’t care about our little ‘pot’ but are surely entertained watching us squabble over it.

If you are struggling with care home fees then let me know, and I can organise a whip round with a few other taxpayers.
You are very welcome.

You do realise that the people you describe in the first 2 paragraphs are the tax payers?

Everyone is a tax payer. EVERYONE
From the wealthiest to the poorest, everybody pays in.

It's not just income taxes.

And who's to say the disabled person didn't earn £150k for 20 years first before they became unable to work? Who's to say the bipolar sufferer didn't?

People fall into thinking the poor have always been poor and therefore they're lazy whilst those earning £100k are hard grafting heros. Bull honky.

Local Authorities are generally on the ball when it comes to deprivation of assets, which of course this is.

Having had the care of a sick OH with a neurological degenerative disease, I do know the sort of accommodation the LA will pay for. It is not good. No-one should be there. One nursing home I visited that was within the LA fees was so appalling that I sat in the car park and wept - no way was my OH going there - no way. I put my home on the market to be able to top up the fees for somewhere decent.

No-one should leave themselves vulnerable to being accommodated in a home that is substandard. No-one should have to be in a substandard home - they should not exist in a civilised country.

After his death my appeal against the health authority for not funding his care was successful and I got all the money back. This is through Continuing Health Care Funding.

@caringcarer you do realise that the Council funded residents will also have been paying tax on their earnings throughout their lives, don't you?

DS1 is unlikely to ever be able to afford his own home. He has hadvto move twice in the last 18months because the (shared) rented houses he's been in have been sold by the landlords. He's currently in a horrible HMO, with no prospect of anything better. He works really hard - often 6 days per week - for minimum wage, and pays his taxes.

The idea that people who are funded by the LA are "scroungers" who don't pay tax is ridiculous.

It makes me so sad to read some of the comments about "poor" people ending up in council run care homes.
My grandparents have never owned their own property, always living in council and housing association places. They are now both either side of 90 and were finally forced to live separately through circumstances earlier this year. My gran is in a wonderful council run sheltered accommodation. She has her own unit, 3 meals are provided a day that she can either take in the communal room, or have delivered to her unit. There's a laundrette where she can independently care for her own laundry. She can have visitors. There's even a unit available for overnight guests if they have a long journey.

My grandad is in a council run care home. It is basic, but he is well looked after, well fed and well respected. The staff that work there are wonderful, caring, respectful and do their best with the resources available to them. We are very happy with his care.

If everyone does this, it just means our children will still suffer the cost via tax & public service reduction.

Absolutely. My Dad had a 18 month long fight with social services to get the basic care that his mum needed, she had dementia and needed residential care urgently. At one point she had been in hospital, Dad was refusing to allow her to be discharged without a care plan in place but she ended up being discharged at night into a taxi without anyone contacting us. She couldn't remember how to get into the building where she lived and the taxi driver took her back to the hospital. It was endless meetings and it nearly did my dad in, she did get care in the end but she had to move homes several times and staff turnover and inconsistent care in authority funded home wasn't great and she went downhill very quickly.

This is a very common tale among my parents friends when it comes to struggling to get their parents the care they need.

On the other hand, my mum's mum is self funding through having sold her house, she chose where she wanted to live at a point where she decided being on her own was unmanageable, got in within a week of making the decision and it has transformed her. She's well taken care of and is happy and thriving.

The idea that she would give that up in favour of my other grandma's experience just so we could inherit is unthinkable to us.

Regarding a post further upthread, someone dying of cancer will never have to pay for care, they would get fast tracked CHC. We were just at the point of my FiL going into a home/hospice when he died, he didn’t have to pay a penny towards his care at home, they provided a hospital bed/ air mattress, grab rails, commode etc.

Not sure when it comes to someone Already in a care home though but would assume they stop paying?

So if everyone is a tax payer, everyone is allowed to get what they are entitled to from the common pot.

People fall into thinking the poor have always been poor and therefore they're lazy whilst those earning £100k are hard grafting heros. Bull honky

My point exactly. But equally people seem to think someone on 70k is living like a king, while that’s not always the case. Sure, if you’re a single, healthy individual it’s a lot. But it’s not a massive amount for someone who needs to support children or a spouse unable to work (or access most benefits because of their partner’s wage). Yet most people and the tax man don’t look at the circumstances beyond the number.

Just as someone on low income or unable to work is entitled to some subsidy, so are the people you described as high earners. So I don’t understand the resentment on either side.

Money buys you choice
if you prefer not to have any choice and trust your offspring implicitly to make sure you get the best care possible regardless of cost then it is an option
I do think most people don’t understand the care home fees situation and things like top ups - do your research thoroughly before making a decision

I wish that councils did a lot more to catch out people doing this as it's immoral.

At present, it seems the council only bother with the "easy wins", i.e. obvious deprivation of capital very shortly before care is needed, and they can't be arsed to look into the "harder" cases.

There isn't enough for the taxpayer to fund everyone's care and it will only get worse as the baby boom geenraiton age and the tax base gets smaller. If you genuinely do not want to sell your house to pay for care then vote to pay more tax - and tax on assets not just income.

This is your choice - vote for more taxes for everyone or keep taxes lower and take the risk you may have to sell your house for care later. Over the last decisdes the voting public have chosen option two and then whined bitterly about it.