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 about ‘is it factual’?

"Factual statements are a subset of true statements." Discuss.

And what you fail to mention is that if he wants to downsize any profit would be appropriated by the LA to pay for care. The disregard only applies to the house he’s living in at the moment. And if his DW is young, the chances are she will live until OP needs care himself so it would be split.

My DH was admitted to ITU on a ventilator. I had indicated that I wanted to be involved in any decision to end life support and refused to accept a DNR. The Liverpool Pathway was observed in the hospital he was in. I received a phone call on the morning he passed away to say that the doctor would like to see me to discuss taking him off the ventilator. By the time I arrived they had removed all but the breathing tube and it was clear the decision had been made. He had had a turn for the worse during the early hours of the morning - after I had been advised to leave him to get his rest and go home, and that they would ring if there was any change. They didn’t. He died without regaining consciousness and I still feel cheated.

I understand your position. However, these statements ring huge alarm bells ”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?”

Does your wife have the mental capacity / ability to manage money? If not, giving £180k to her spouse is madness. You could explain to MIL about care costs and suggest a discretionary trust. Suggesting MIL wills you this sum is not a good idea. If you want to protect the funds, you can find her independent advice so she is not swayed by anyone and can make her own decision about what’s best for her daughter.

I think there are some unpleasant tax issues with discretionary trusts eg the every 10 year tax with the weird calculation. The vulnerable persons trust and tax advantages.

It could still be a discretionary trust but you complete a form / document that means there are tax exemptions.
This is the best form of trust for a person who cannot make decisions about their financial affairs and needs to be written in such a way that means it is not included in a financial assessment for social care.
MIL needs independent financial advice.

I have contacted a inancial advisor to look.into a vulnerable person''s trust.

I am happy about this possibility.

All I wanted was to secure the best financial future for my mentally disabled wife. I have been accused of a variety of awful things by the vile posters on here.

Turns out I was right and they were wrong. In my circumstances (which I have been very open about) my wife should not have to fund her care by using her inheritance and I was right to look into ways to stop this happening.

I am so grateful to the intelligent, knowledge and helpful posters who took the time to respond.

This really needs to be your MIL’s decisions and she should be able to attend (if that’s practical?) and be able to make her decisions independently.

I understand guiding her and explaining that if she wills her daughter £180k, it will all be spent on the care home but it is MIL’s decision. A discretionary trust protects your wife and ensures she has a steady access to income.

I want to.discuss the nature of the trust first so I understand then I will approach my wife's family.

It is not my decision to change the will. My wife's family, like me, want to secure the best financial future they can for my wife.

I'll look onto discretionary trusts too - thank you.

In all kindness, you’re not an expert in this area. The best thing you can do is focus on their understanding (well, MIL’s understanding ), not yours.
They need advice from a professional and it should be independent.
It is important you let her know that directly leaving the £180k means the money will automatically go on care home fees. It’s very kind of you to point them in the direction of help and advice. It is not necessary for you to guide them when this isn’t your area of expertise.

Excellent advice thank you.

Good luck! I don’t know why people are clutching their pearls. I think perhaps it was the way you worded it but even so, you’ve had some below the belt comments. It is extremely common for people to protect their disabled children by using discretionary trusts or other similar means.

I am sorry you’ve had such spiteful comments about caring for your wife and questioning your commitment as a husband. Some people really don’t understand the commitment of 24 hour care for an adult for decades on end. I know you mentioned dinners and day trips, it’s really great you are able to have these parts of a relationship and life together.

A solicitor will help you, discretional trusts have a 10 yearly charge and exit charges, so I wouldn't be going down that road.

A well written Immediate Post Death Interest trust doesn't have such pitfalls being exempt from periodic charges and exit charges (instead they are counted as the life tenants estate for IHT, the current threshold levels would mean that would not be an issue as things stand), are very tax efficient and will safeguard the inheritance whilst giving flexibility with how you invest the funds.

One little tip (my wife is a wills and probate solicitor, so I've picked quite a bit up down the years) - Your MIL should contact the solicitors herself and see them alone, solicitors are extra cautious with very elderly clients (even those who have capacity) if they have a younger person with them all the time, particularly if that person stands to benefit in some way.

This will cause the solicitor to draw the process out, in order to be quite sure there is no coercion. And I know of at least one case, where a 98 year old lady died before everything was completed - her son was always with her, so the solicitor slowed the process down - even though she instigated it.

Yes it’s the testator who has to make the will and show complete independence of thought. They might also want to get her capacity checked and signed off.

It’s not giving the money to the council. It’s paying for something your wife needs, and will be able to afford.

Why should tax payers pay for those who can afford it?

The inheritance isn't 'rightfully' anyone's until it is inherited. The person who is doing the gifting of the inheritance can choose to divert it at any time, as long as they have mental capacity. And I think the mum would be EXTREMELY wise to divert it, if the money is all going to get taken off her daughter.

In the case of vulnerable adults the government have decided that would be unfair and they have passed laws so that this doesn't have to happen

The government have decided that it is fair for tax payers to pay.

Absolutely. Governments have gone to great lengths over the years to encourage certain behaviours through the tax and legal systems, and protecting inherited assets is one of them. Imagine if all those who have criticised this for "robbing the public purse" (!) were to turn their wrath on ISAs, for instance. "How dare people get away with not paying tax on their savings?"

Good luck to you, OP. I'm really sorry for your situation and hope that you can find good legal advice for your MIL.

Rachel Reeves has cancelled the planned cap of £86,000. It had been delayed due to Covid, but now there will not be a cap. If OPs mother lives a few more years there will be no inheritance to pass on.

Not all trusts are excluded from the financial assessment for social care. Therefore, this is more important than exit charges and other charges. There will be some exceptions if set up correctly as the wife of OP is a “vulnerable person”. Given the wife of OP has long term health and social care needs, she will most likely always need her income to be protected and managed by others.

Ok, how about we stop all the mega rich people avoiding tax first? (I see plenty of it in my line of work) And all the million/billion dollar companies before we start pumping money into taking once in a lifetime sums of money from struggling people?

No one has played any systems yet. OPs wife doesn’t own the money yet.

I'm.not playing the system.

The government has decided that if a vulnerable person inherits, that money cannot be used in means-tested calculations.

Tell you what, @ilovesooty you take my wife's brain tumors and permanent loss of physical and mental capability and I'll give you the inheritance.

Mumsnet really does hate disabled people.

I think that people have no idea about anything and comment without any personal experience.

The Government has created the notion of vulnerable persons trust to protect the weakest in society. Without that protection, people would be leaving money to other family members to ‘look after’ the disabled family member with no protections thst money would be used for thst purpose. Clearly they won’t be as stupid as to leave it to the disabled family member to be swallowed up in care home fees. The Government acknowledges that having a life firm of care needs is a blow. Moreover they also protect the monies of people who receive compensation as part of their injuries.

Most people use some tax avoidance schemes eg paying into your pension is a tax avoidanc scheme as you don’t pay tax on monies paid in and can take out 25% tax free etc. Putting money into an isa is a tax avoidance scheme. Putting money into premium bonds is a tax avoidance scheme. So anyone who does thst who are you to judge someone using a legal method to avoid care home and benefit claw back? How many of you pay more into your pensions to so that you can claim child benefit?

I can’t believe that people attack the OP in his position and don’t show sympathy.