Spending downsizing cash

[CueilleLeJour]

I'm really not sure if I'm being unreasonable here.

Mum is 87 and downsized a few years after we lost my dad. She bought a nice little flat and had £150K from the sale.

Growing up, we never had much money and dad kept a close hand on the purse strings. Mum was left with a comfortable but not huge pension, and some moderate savings which she has spent over the last few years.

Since downsizing, she has basically had access to more free money than she's ever had in her life. In the last year, she's spent nearly half the £150k. Mostly on the flat - new kitchen, bathroom, carpets, furniture, professional decorating etc - but also an expensive holiday. It's clearly been an amazing feeling for her to have all the money she could dream of and spend it without my dad's disapproving eye peering over her shoulder. Part of me thinks it's great and she should just enjoy it while she can.

But part of me is really alarmed at her getting through half the proceeds in a year, and I worry about possible future care needs. My BIL's mum is 90 and has been in a care home for 3 years and it's just burning cash. They wouldn't let her in without proving she had 2 years of costs up front - which I think was about 140K.

My mum is just convinced she won't ever need a care home, and I know she's better off than many people who have nothing put by. It's also really none of my business, it's her money to do what she wants with. It's not dementia or anything, just someone who has never really had to make financial decisions having a whale of a time splashing the cash.

But am I right to have a little anxiety about it all?

YABU You only live once, she's right to spend it while she can
YANBU It's a bit reckless to spend half your downsizing profits in the first year

If she has no money left ( or less than £23250 ) then if she did have to go into a care home or have paid carers at home then it would all be paid for like it is for so many who have never been able to save throughout their lives. Like you I would be glad she's having fun with the money but would also think she has some responsibility to save some for future acre needs as the money could bring her some choices over what care home she goes to etc or just being able to afford things that may help to keep her independent like a profiling bed etc. If the money is being spent on walk in showery/ wet room etc then that will benefit her. My own dad keeps his savings just below £23250 !

What are her monthly outgoings against income ignoring the lump sum? My dm downsized 18 months ago. She did spend a good amount doing new bathroom and kitchen for new flat but is now using her lump sum to support her life - she spends nearly £3k a month on carers visiting her in the flat. She also has money to spend on taxis so she can go out. I don’t think she realises how much all the care is costing but it’s a good use of the money. The only thing I did discourage was gifting large sums to my siblings children for houses. I’ve said we can make the gifts out of the estate when she dies (it will be me basically giving up my share I think) because I would rather that then her run out of cash for care and then I feel obliged to cover the costs somehow.

Hmmm my best friend is going through an awful time atm with care for her dad so i would share your anxiety. She has basically been told that the nhs won’t cover his care, and once the families savings are rinsed, it’s on them. So it may fall onto you. I never had a clue this could happen but it really can!

Families do not have to pay for care unless there's something gone on in the past where the person needing care has given all their money or assets away to their kids. If someone runs out of money to pay for care then the local authority pay. They may not be be able to stay in the same care home but they will get their care paid for.

If I may say, OP, your Mum finally got to some freedom and joy. At 87, wow! Leave her to it.
Hearing about your Mum gives me hope I will be able to do similarly one day, I'm "only" 44. 😊

With the loss of her husband, she’s undoubtedly feeling that life is short so she may as well enjoy it while she can. For her, that means making her new home lovely to live in. I get your concerns, but only she can make the decision to save for care or not.

You can't just put it in a trust. LAs would still come after the money.

She might never need a care home. My parents both died young - my mum never got to spend and never had anything - she’s enjoying it let her. When she dies you’ll be sad she didn’t use it to enjoy herself.

My parents are in their early 80s and a few years back helped my younger brother out to the tune of £30k. That was practically all their savings but he really needed it. Anyway my brother only has weeks to live and he has told them to take the money out of his very small estate. He has been unemployed for years due to an accident though somehow at some point they decided he was fit for work!
Dm told me they needed it for care home fees in the future. Not sure it will make much difference but its their money. I'd rather they spent it on themselves or new carpets (they have had the same ones for 40 years).

OP it sounds so sad to scrimp and save all your life, only to spend all of it on care. Never getting to enjoy any of it.
Especially as you might end up in the same care home as others who chose to prioritise fun and now have everything paid for by the state.

Let her enjoy herself. The flat can be sold if needed she has one life and will never get the time back. I hope she's having a whale of a time!

I am another one for team spend it. If she does require care. They will spend every single penny she has saved up to 23k. She may as well spend it on what she wants.
I would just advise her to make her current property accessible, so she can stay there as long as possible e.g. walk in shower, hand rails, employ a gardener and a cleaner, ensure garden and front door have no step access, declutter.
It is much better to stay in your own home than go into care, if possible.

I can see why you’d be worried OP, but I think it’ll be OK. She’s having some fun in her later years, but she’s also adding value to the flat. So if she does need to spend her final years in a care home, she’ll have a more valuable asset to fund it than she would otherwise have had. If she doesn’t end up in a care home, presumably she can live on the pension if the lump sum runs out.

She has basically been told that the nhs won’t cover his care, and once the families savings are rinsed, it’s on them. So it may fall onto you

This is a nice story but what your friend has told you isn't true. This doesn't happen and there is absolutely no requirement for family members to fund their relatives necessary from their own pocket.

I think you’re right to have some reservations but ultimately I think it’s lovely that’s she got a lovely flat which she’s spent money on doing it up to a nice standard to make her life comfortable. She may never need to go into a care home and there are always solutions even if she does.

my Nan downsized after my grandad passed away many years ago and spent money on living her life. Her biggest fear was not being able to stay in her own home. She never went into a care home and passed away at 95 after being fairly independent the way she hoped she would.

conversley my MIL is currently in a care home after a series of falls, she had no savings and lived in a council property her entire married life so had zero assets to pay for her care. She is placed in a local authority funded home and has absolutely thrived there

My best friends partner always says his mum did the right thing and spent her money on cruises, as both friends mum and MIL are receiving in home care, both only early 70’s. One getting it paid for by the Government, one paying herself. I say let her spend it, she’s had years of having to ask permission and I don’t blame her one bit for splashing out now. Enjoy!!

Let her spend it.

similar circumstances- mil was financially abused by her husband for years. Finally sold her house, downsized, and had cash burning holes.

she had a wonderful 3 months shopping, spending, treating her children, before suddenly dying.

i’d hate to think that joy and freedom of doing what she wanted was curtailed by “saving” for future care.

she could live another 15 good years yet, a long time if she runs into financial trouble.

She is 87, let her live! She decorated her flat nicely surely that will now last her for the rest of her life. She doesn’t need to redo it all again in a few years I assume. Are you worried she is spending your inheritance?

my dear relative died before she even turned 80 after a horrific accident and spent the last 6 weeks of her life in pain, agony and slowly dying. Life is for living you never know how long you have got.

Also realistically what are going to do? She is an adult and can do what she wants. As you said she doesn’t have dementia.

I hope I have not misunderstood the OP

My feelings:

Let mum enjoy
Re care home fees - as long as she has not deliberately deprived herself of assets and they cant prove otherwise, she is ok.

The downside is, if care home was ever required, you do get a better care home in the private sector but her 150k she had would not have gone far as costs are very, very high, well where we live they are/London

What 'financial trouble'? Maybe a less nice care home. But that's it. She has a flat anyway still and OP's worries are about care not daily spending so she probably has enough for that.

Also I hope to God I won't ever need care but if I'm lucky enough to reach a ripe old age after working hard all my life. I'd enjoy, and live on toast for the rest of my days if it came to that. I'll be dying eventually anyway. Being alive, but barely able to do anything, regretting not taking the chance is far worse than saving for something that may never come.

I would be tempted to go down the “l will only tell her once”route with this. It’s really easy to say she won’t be going into a care home but none of us know what is around the corner. Especially if you don’t want her to move in with you / she expects you to pay her care home bills

Im firmly in team 'spend it and enjoy it'. Good for her!

I have elderly relatives who I wish would spend more money on themselves, but they seem to just let it accumulate for years. My uncle has a good civil service pension, and tens of thousands in his account while wearing old clothes with holes in them, or relying on crappy hearing aids that don't work. I despair. He will not listen when we suggest he makes his life more comfortable.

My mother has about 50k in cash that she is keeping in a box as 'insurance', not sure what that is for, and many more thousands in her accounts that she won't spend either, despite the fact that her house is getting more and more dilapidated. I wish they were both a bit more like your mum.

People save 'for a rainy day', at 87 years old I would say it's raining now.

One thing to be careful of if she does need state support for care is that they are entitled to go through your finances and if they think you have deliberately deprived yourself of funds so as to come under the threshold for state care that can affect what you are offered as support (not sure exactly how).
So putting money aside in a trust, or burning through it quickly would both cast her circumstances in that light and not go down well.
It might be worth checking out the details on that so as to not inadvertently create a situation.

Apparently the transfer into trust thing doesn't work any more. Age Concern has some useful information about deliberate deprivation.