Inheritance and care home fees

[Hateam]

Hello!

My mother-in-law is in a care home.

My wife, her daughter, is also in a care home for medical - non age related- issues. My council are paying for my wife's care as we have under £24500 in savings.

When my MIL dies (she's 94) my wife will inherit about £180,000.

We don't want this money going to Essex CC.

Is there anything we can?

Could my MIL's will be changed to remove my wife and replace her with me? She is still of sound mind.

Could the money go into an account in my sole name?

I am aware of the concept of deprivation of assets.

What's your wife's diagnosis? If she's not elderly and her care is due to health needs she could be eligible for continuing health care funding.

As regards your mother-in-law, I wouldn't bet on either of you receiving any inheritance. She would only need to live another three years and it'll be pretty much gone.

This thread actualy sucks

Not sure about this -but is a deed of variation a possibility in this case?

OP please look into claiming attendance allowance as well for your wife, and MIL if she’s not already claiming

She hasn't got an inheritance. She may or may not have an inheritance when her mother dies. Her mother's money might all be gone, her mother might decide to leave it to someone else or burn it but the OPs wife has not inherited anything.

Sorry on what legal basis. She has not yet inherited the money so how can it be ‘deprivation of assets?’

Legally of course your MIL can change her Will so the assets pass to other members of the familiy
Lots of people do this

And no way is it deprivation of capital

& when there are no care homes who looks after the elderly? They are businesses would you go to work for free?

It needs to go in a trust for your wife and trustees appointed, hopefully yourself and another.

Why?
gifting is legitimate tax allowance. ALL tax allowances are there for good reason put in by government to drive “right” fiscal behavoiurs with public

anyone thst has money and doesn’t use their allowances is frankly bonkers!

gifting is very limited, it is allowed so that, say, parent can gift money for weddings (gov like marriages) for grandkids (gov like g/c to have money for higher education etc), and for passing on wealth to their children where needed a min of 7years before their death (eg redistributing wealth from older to younger generations to help stability such as housing and take pressure off social housing, rental etc)

we have IHT . Thst taxes “excess” passing on of wealth. Arguably it is too low now as hasn’t been changed despite salary and house price increases and massively sucks in way more people than ever dreamed of. Personally I don’t have issue with it, even though just my house would exceeed it pretty much ! And that’s a 2 bed bungalow I downsized to for my old age.

what is bonkers is the IHT allowance set at 375k but with additional 125k if you have house. Want to know why we have tons of empty houses belonging to elderly living in care homes? Because if the house was sold (for lots of reasons a good thing) ,IHT allowance would reduce . It is dumb low. Drives entirely wrong behavoiurs. Hey ho.

For what it’s worth I paid higher rate tax for years. Bet I paid more tax than Rees Mogg 🤷🏼‍♀️. I do not begrudge that. In fact would have been happy to pay more for nhs, care , and education etc. it is unfair taxing that has always irked me. We were single wave housevnot by choice, dp had severe and enduring mental illness and could not work. No benefits as I earnt too much. But at times couples earning nearly twice my salary combined paid £9-11k LESS tax than we did as family. The unfairness of paying for “care” of someone who cannot manage to look after themselves , often du to cognative decline, which is a physical life limiting illness , vs not paying anything if you need nursing for end of life care for cancer, heart disease etc, is not “fair”. It’s an arbitrary decision based on what costs more, and the universal underfunding of mental illness

It sounds possibly like a stroke. Have you checked you are getting all of the benefits now you are entitled to? Look at attendance allowance.

Yes, exactly. This would be called fraud!

You need to recommend your MIL gets a solicitor to rewrite her will with the money going into a trust for the benefit of your wife. You need to suggest this asap as your MIL will need to be of sound mind to do this. There are several types of trust and the solicitor should be able to advise what is most appropriate.

Your wife will be the beneficiary of the trust, the money can only be used for your wife's benefit. However the money does not belong to your wife, it belongs to the trust. It shouldn't be taken into account if you or your wife are being means tested for a benefit.

Your MIL needs to nominate trustees who are responsible for the administration of the trust and releasing money for your wife's benefit. Hopefully she would nominate you. Is there anyone else who could do this alongside you, or if you were ever unable to do this? A relative or longstanding friend?

A solicitor can be a trustee but they would charge for their time.

Trustees have responsibility to register the trust with HMRC, complete a yearly tax return, ensure the trust pays tax due, invest the money appropriately, and to use the money appropriately (in this case for the benefit of your wife).

Be aware that trusts do pay tax which can be in excess of personal tax rates, so do check if your wife's residential care will actually be chargeable to her.

https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/attendance-allowance/before-you-claim-attendance-allowance/check-if-entitled-to-attendance-allowance/#:~:text=If%20you%27re%20living%20in,your%20care%20home%20costs%20yourself.

"You can't usually claim Attendance Allowance if you live in a care home and your care is paid for by your local authority. You can still claim Attendance Allowance if you pay for all your care home costs yourself."

I do feel people who can afford to pay for their care, should.

Do you apply that to hospices, cancer care, surgery, or any other care currently provided by the NHS. The OPs wife is not elderly, she requires care through illness. Presumably you think people should be means-tested if they want obstetric care on the NHS, as that's not even needed through illness, but choice.

I hear where you're coming from OP. Wishing you well

I understand your position completely.

If your MIL can change her will she can leave it to you or leave it in a discretionary trust of which your wife is the beneficiary. We set up something similar with co-op legal.

Either way it will not be taken into account by the council - your wife's contribution to her care costs will be based on money which is in her name only.

Some of you have very little imagination about people's care needs. Just because someone can be taken out occasionally it does not mean they could be cared for full-time at home.

An example: when my late father was 76 he had a very severe stroke. It left him unable to walk and paralysed in his left arm. He was incontinent and needed to wear adult nappies. He could no longer speak apart from the odd word. It was difficult for him to make his needs known. He was on warfarin and needed his blood checked daily by nursing staff. He needed dressing, bathing and transferring from his wheelchair to his bed - a trained, two carer job. He needed supervision with feeding.

He was able to come home to my mother's non adapted bungalow for a few hours on a Saturday afternoon. There was no way my mother, also in her 70s, would have been able to have cared for him at home for longer than a few hours.

So please do not assume that if someone is able to be taken out by a relative for an occasional meal or to a show that the family member could safely care for them full-time at home.

He did get continuing care (which can be very difficult to get) and most of his nursing and care home fees were paid for by the local authority. They still took his pension apart from a small amount of "pocket money".

He needed care for 6 years before he died fairly suddenly of kidney failure.

I hope none of you find yourselves or your relatives in this situation.

Agree, but why can Scotland government be so different, they don't have to pay nursing care or residential care, why is uk so bad, my dad paid out of his state pension and little private pension towards his nursing care and was left with £12.50 pocket money aweek, over time fee's went up and family had to pay 'top up '

Speak to a solicitor about the option of setting up a trust.