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.

I didn't say that.

I said he need to get legal advice.

Obviously you are right, no one is eager to cough up huge sums in care fees and thus deplete a family inheritance but............
Tough cookie - if a relative needs care and the money is there in the family, those fees need to be paid.
The fees need to be paid. If you've got the money then you pay.

Your difficulty I think is that given (a) your wife's situation and (b) her Mother's age and ongoing care needs pretty much anything is going to be seen as deprivation.

If the main reason for any transaction is 'we don't want this money going to Essex CC' then it's exactly what deprivation means. If your MiL were to rewrite her will so the money went to you or your children and she does that so as to remove it from her daughter's financial means for care it'll be seen as notional capital.

Expert advice may come up with something technical or involved but even then....

I think you're stuck!!

I didn't say you did!

@Hateam To give you some practical advice, it may be best for your MIL to set up what is called a "trust for a vulnerable beneficiary".

In this way your wife's inheritance will pass directly into the trust which will then be used for her daughter's benefit but it is not passed to her directly and so is not counted when it comes to means testing.

The trust can be set up either now or on the death of your MIL.

Please speak to a professional advisor about this.

She was assessed and the result was she needs 24 hour care. The tumours have left her with permanent brain damage. She can't care for herself.

I don't know what it was means tested. I had to fill in 2 online forms. No other option has been mentioned to me.

Totally agree. My DM went into a care home last year, her house has recently been sold and so now she has over £200k in the bank she is paying her own fees. She's only 70 and not in bad physical health, so I assume most of it will go to her fees.

Would my DSis and I prefer to each pocket a hundred grand? Well of course! But that's not how it works.

Thank you.

That's very helpful.

Well, Essex County Council won’t be taking her money, she will be funding her care from her inheritance. That is paying the home car fees herself . I don’t understand your issue.

I don't have any advice for you. The system is the way it is. I think that care costs are exactly the sort of thing that should be largely funded socially. For the elderly, and even more so for the younger people who need it. It's a grim financial lottery otherwise, with some people who have good health all their life able to leave funds for their family to inherit, while others through bad luck are unable to do that. We accept that the state pays for health care regardless of means to pay, why not for this sort of care, at least to a basic level? I hope this is changed soon.

Having said that, I also think that inheritance tax should be higher. Same principle - why should some people inherit large amounts, and others, through no fault of their own, don't?

If MIL is alive and is deemed capable then she can write her will however she wants whether it is to op or to the cats home and will have no effect on the daughters financial position.

That doesn't solve the problem that the motive for setting up the trust is to deprive Essex CC of the assets.

1. The country is on its knees financially and those that can pay their way should be doing so.

2. The OP has a choice. Arrange 24 hr care for his wife at home and use the £180 inheritance. Or the money pays for her care home because she will go above the savings threshold.

3. To counter the argument about assets already having been taxed at source (income tax) A sizeable chunk of the value of most properties is due to inflationary growth.

4. To expect the state to pay for elderly care like in the good old days is naive in the extreme. Will you pay more tax to cover this? What would you cut to fund this? Health, education, defence, roads?

5. We all have a duty to think about how we will manage in our old age. Especially if we have means. Trying to run off into the sunset with an inheritance while expecting the state to pay for elderly care, is quite honestly, offensive.

6. I get that there is inequality, and some families face enormous bills due to long drawn out illness. The country needs an honest debate about that. Anyone expect politicians to level with the public on this? I don't.

7. Passing large amounts of wealth down the generations is one of the biggest contributors to financial inequality in this country.

I sit on a committee with lots of doctors. They have told me about continuing health care and how hard it is to access. From the little information I have, it sounds like your wife should have her care paid for by the NHS. You will have to FIGHT for this but don’t give up. Most people are successful on appeal.

I can’t believe the response from some of the posters - this is medical care that the nhs should fund. Would you all be happy to pay for your hip replacements and cataract surgery ?

the other way to put the money out of reach of the council would be to leave it to grandchildren (your children) if there are any. But of course you and your wife would have no access to that money.

good luck

I assumed he was in full-time work, which is why I mentioned private carers. OP would do the care evenings and overnight, with carers coming in during the day.
Do you think it can't be done? Thousands of women up and down the country are already doing it, saving the taxpayer an absolute fortune.

As for the outings - restaurants and theatres are not cheap, and I strongly suspect that OP would enjoy them more than his wife with her limited capacity.

AIUI 7 years relates to IHT. Deprivation is (mostly) about motive.

If you take steps long before care needs/costs are an issue you should be OK; it's actually quite rare to need care.

Problems start when, as here, the wife's care needs are established.

@Hateam the social worker would have done a continuing healthcare checklist when assessing her needs. If she was entitled to CHC then it means that the council pay less which of course would be their aim. So it's very doubtful your wife is entitled to CHC.

There are hundreds of thousands of people in the UK who are under 65 and who have 24hr care needs that don't come under NHS funding.

No one gets the NHS for free we pay for in our taxes. The more tax you pay the more you pay for the nhs. Because if the wife received an inheritance she in fact would be better off than most of us. If she has savings that should be used for her care. Why should I pay for her care? Whilst the husband goes on day trips with the money. Think she would prefer to have help to be fed, bathed, cleaned on a daily basis, than a jolly to London to see a show.

You can set up a vulnerable persons trust which protects the assets from social care / benefit claw back. There are pre requisites eg a certain PIP level which your wife should be on it in care. You do need that properly drafted by legal who specialise in this - not your average high street law.

For people having a go it’s no worse then making lifetime gifts to avoid IHT or not paying tax on ISA as they are in a protected wrapper or not paying IHT on pensions or claiming child benefit despite having crazy high incomes because you sheltered money in a pension to reduce income.

I’m sorry you have had such a tough time OP. It must be tough having 2 family members in care.

The money has not vested yet so there is no deprivation. The mum has freedom to do what she likes with her money.

You have no idea if the OPs wife needs 24hr medical care. I'd guess it's highly unlikely that she does as she is being funded by the council. If they could hand those costs over to the NHS believe me they would.
Just because someone needs 24hr care does not mean it needs to be done by medical professionals. Again there are hundreds of thousands of people up and down the country who have all their care needs managed appropriately by formal and informal carers. You don't need to be a nurse to change a catheter bag or a peg feed, or to hoist someone in and out of bed.

Would it be considered deprivation of assets though, when the assets (potential inheritance) don't yet (and may never) actually be in the possession of the individual? The money in question still belongs to the MIL - and she can determine to whom she wills it. And if she lives another 3 years in a nursing home, most of her money will have already gone to pay for her own care.

To those who are making nasty comments to and about the OP - this is a man whose wife has become profoundly disabled and her and their future is totally changed from the life they presumably imagined they'd have. A bit of sympathy and empathy wouldn't go amiss as he tries to process what has happened and what can be done to make things at least a bit better.