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 the value of her flat would cover a few years of care home fees (it sounds like it would), I would encourage her to enjoy the money whilst she's fit and well enough to. The council will just put a charge on the property and pay the fees until the flat can be sold (after death if necessary), then reclaim them from the estate. When she's down to £23k (or £26k, I can't quite remember) the council will pay the fees. Even if there's a top up to pay, that can come out of the £23k that's left.

No but if she is still spry her chances of being one of those 90+ year olds is quite high!

I have 2 aunts who have been on cruises (Iceland and Norway to see glaciers, volcanoes and such as day trips - not sitting on a lounger - at 93, one is always off on coach-based holidays in the UK at 93, one went to a wedding in the U.S last year...

This is not correct. Families are not liable for their relatives care fees at any point - it is the sole responsibility of the person going into care. The local authority will look at your age and overall health, and whether you could reasonably have expected to need care at the time you ‘disposed of’ the funds available. Doesn’t matter what you spend it on - if you burn through money which could reasonably have been used for care it will still be viewed as deprivation of assets and the local authority will carry out the financial assessment as though you still have it.

This happened to a relative of ours - he was assessed as in possession of almost £150,000 - he had actually wasted it all in less than a year and the LA refused to contribute to his care until he fell below the £23,500 threshold at which they start to pick up some of the costs. This meant he had to sell his property to meet the fees, which probably wouldn’t have been necessary had he not thrown caution to the wind and gone on a spending spree.

Sorry, you are wrong about putting a property into trust to avoid care fees. It’s a deliberate deprivation of assets and the council can apply to have the trust dissolved. And there is no 7 year rule on d of a.

The council don’t recover the fees from the estate. They put a charge on the property and the person going into care enters into what is effectively a loan agreement with the local authority -it’s called a deferred payment agreement and attracts interest and arrangement fees. If the property isn’t sold until after the person in care passes away, the LA can effectively force the sale for less than market value to recover fees if it isn’t sold within an agreed time frame.

Yep. People confuse the seven year rule with a similar thing affecting inheritance tax. Local Authorities can go back as long as they want when investigating potential deprivation of assets and as you say, apply to the courts for dissolution of the trust to recover care fees.

Families are not obliged to cover care costs for their relatives. I would get some legal advice if this is the case because local authorities can only assess care fees based on the savings/assets and income of the person actually going into care. Anything the family may want to ‘top up’ to enable a better care home or extra services is purely voluntary.

No one in my family has made it to 87 so at that age, I cannot see what the point of a rainy day fund is anymore.

If she gets ill, she'll probably die quickly as the doctors won't want to treat her aggressively given her reduced odds of survival.

You say she's burning through the cash: it sounds like she's spent a lot on one nice holiday, but at 87, she's hardly likely to enjoy backpacking and staying in hostels. Much easier to go on a more expensive tour or cruise with paid staff who are available to sort out any problems. Most people enjoy holidays, and it doesn't sound like she's had a nice one in a while, so most people would justify that.

The rest of the money she's spent on doing up her home. If and when the flat needs to be sold to fund her care, the work she's spent doing it up will make it more attractive to buyers. So, she's hardly wasted the money. And doing up the flat will make her more comfortable.

When she becomes less mobile (which is inevitable with age), she'll be able to enjoy looking at her nice environment than staring at peeling wallpaper in colours she hates. It's an investment in her current and future metal wellbeing.

Nothing about your posts convinces me that you are genuinely concerned about your mother and not just eying up your 'inheritance'.

Stop thinking about the money and enjoy the time you have left with your last remaining parent. Take lots of photos together. Record her speaking to you. You'll treasure that so much more than £150k when the time comes and you end up an orphan. Don't fall out with her over something as inconsequential as money.

Soooooooo many people clearly not understanding the rules around care fees. It’s not a question of spend your money and let the LA pick up the fees later on. If you are assessed as having a reasonable expectation of needing care at the time you are spending the money it’s deprivation of assets and the LA won’t simply pick up the slack - they will assess you as though you still have those assets. And if the money was saved instead of simply indulging in a spending spree, the OP’s mum would have much more autonomy over the type and location of the care she needs, instead of having to accept what the council deems to be adequate - and from experience, there can be a massive difference between the two.

If only this was true in England. You have to be on your last legs or have advanced dementia and be deemed a risk to yourself/others to qualify for "free" state funded care. Even then it's likely that social services will do everything in their power to keep you at home. So bed based care has become a thing. Basically you are left in bed all day with carers coming in 4 x a day to change your incontinence pads and give you food.

Totally agreed.

Carers are sent and even the ones via council are very expensive.

Many millions would not have bought their homes and spent their hard earned cash if they were at the time aware of growing old, care fees, and IHT

If she gets ill, she'll probably die quickly as the doctors won't want to treat her aggressively given her reduced odds of survival.

She’s 87, not 97. At 87 my mum got breast cancer for the third time and had successful conservative treatment. At 89 she had a stroke. At 90 she was diagnosed with vascular dementia and cardio vascular disease. At 93 she’s still here - frail but still retaining a sense of humour and an appetite for life. You absolutely cannot predict these things - a lot depends on overall state of health when these things are diagnosed. Some people are much better placed to deal with them than others.

For the people saying “sign over the property/money” there’s a time frame as to when the money becomes “protected” (like 10 years or something 🤔).

From personal experience I agree entirely. My mum has breast cancer, advanced vascular dementia and suffers from the effects of a stroke. She didn’t qualify for NHS continuing health care despite being quite severely affected and social services arranged for carers to come in three times a day. Mum lives with us and I had first hand experience of how inadequate the care was.

If she refused to wash they wouldn’t force her. They barely knew how to make a sandwich and there were so many occasions that they turned up so late in the mornings that I had to shower and change mum due to incontinence, so there was nothing for them to do when they did arrive. Mum was charged almost all of her income based on a set number of hours of care per week - in reality the time spent by the carers was barely half the assessed amount so mum was paying for care she wasn’t getting. We stopped it after two male carers turned up to shower her and she was so distressed she was almost hysterical.

We now have one private carer coming in for an hour in the mornings to shower, dress and breakfast her. It’s more targeted and although it’s more expensive, mum’s much happier, in a better routine and has a good rapport with a carer she knows and trusts. The social care system in the UK is broken and vulnerable people are being ripped off by massive costs for inadequate care.

Tell that to my dead dad.

He was only in his 70s and he absolutely got worse medical treatment because of his age.

I am incredibly delighted on your behalf that your mother is still here. As I said, no one in my family has made it to 87 let alone 93, so I am pleased for you.

But I don't think at 80-something or 90-something it's realistic to expect a major disease to be treated aggressively by a doctor in this country, so I don't think worrying about the future is really necessary.

Your mum is lucky. She's not the norm.

No there isn’t. There used to be a seven year rule, similar to the one for inheritance tax, but that stopped some time ago. Disposing of property or funding to avoid care fees is called deprivation of assets and the local authority can go back as long as they need to during investigations.

Sorry for your loss, but my point was only that you can’t predict if someone will survive even severe illness in old age - it depends on overall state of health at the time the illness starts.

Well the first point doesn't apply to OP's mum as she has no current health issues. Age alone isn't an indicator of having 'reasonable expectation of needing care'.

Regarding the second point - OP's mum still has a flat that could be sold to fund care, if needed. In fact half her money has gone on this, increasing its value so really it's an investment.

I'd advise caution if she was renting, going on lots and lots of expensive holidays and determined to spend her last penny. But she's a homeowner, spent money on improving said home. And went on 'one' expensive holiday.

You can never predict how long someone will need care for. Say her flat pays for 2 years of care, the extra money could pay for another 2.. well. She might need 6 years. Or only 2. We never know.

There has to be a limit, IMO earmarking her flat for that, and spending the rest is fair enough. But again, just my humble opinion.

I don’t see anything in OP’s post to suggest that inheritance has anything to do with her concerns. She’s seen first hand how quickly another relatives money is being eaten up by care home fees and she’s worried her mum won’t have enough money up front to be considered for care, should she need it. And at 87 it’s not beyond the bounds of possibility that she may need care in the near future. So why do you think it’s about her inheritance, given her concerns are perfectly reasonable - she’s clearly worried that with no-one to say no to her mum, her spending is out of control. And in the event she does need care fairly soon I can assure you that the local authority won’t view her burning through £150k as inconsequential if it’s money she could reasonably have expected to have to pay for her care.

Good for her. Listen to the part of you that thinks that. If she needs a care home her flat can be sold. I wish my parents had spent their money.

From personal experience - our local authority most definitely does use age as an indicator of future care needs, regardless of current health. They assess as though you still own the assets you have disposed of, so any help with fees kicks in later than it would otherwise do and affects whether you are accepted for residential care, as you have to prove you can provide a certain amount of upfront fees. I think the problem is that each LA seems to have its own rules as to how fees are assessed and charged, and sometimes it’s really complicated.

Highly unlikely! 😭

The OP states most of the money has gone on the flat, i.e. enhancing a capital asset that can later be sold! The local authority can put a charge on that flat and it will be worth more than a flat that hasn't been updated in years.

She hasn't frittered away £150k. She's gone on one holiday, and done up her home.

Someone who is young and otherwise is good health is more likely to survive severe illness because 1) they are young and otherwise in good health and 2) the doctors are more likely to take a more aggressive approach to treating that illness.

Someone is old has the odds stacked against them 1) because our bodies function less well the older we get and 2) the doctors will not go all out to treat them.

If you think doctors don't treat people differently based on age, and that being given worse medical treatment doesn't have an impact on your survival rates, you're kidding yourself.

Do you really think a doctor is going to try as hard to save the life of an 80-something year person as they are a 20-something year old with a lifetime ahead of them? I stand by my point that getting ill when you're older means time is about to run out, and you may as well enjoy every day you've got at that point.

PS To be clear, I'm not angry at you and I hope I don't upset you. The above just reads angrily because I'm still in the angry stage of grief - it's not actually aimed at you at all.

Good on her enjoying the money while she still can