Power of Attorney and self-funding care homes

[Reredos]

Both parents moved into a care home last year. Their house was sold to pay for the fees and all three children have joint POA. My mother would like to give each of the five grandchildren a cash gift of £3000 as she is aware that the proceeds of the house will only pay for their fees for the next two years and there will not be anything left for the grandchildren to inherit.
I am not sure that this will be allowed as it may be seen as though they are deliberately getting rid of their money so that they could be state funded. Can anyone advise please?

I am not sure what the exact position is. Your local authority is the body that will pick up the tab if your parents can no longer afford the care and they probably have rules about this. Do they have them on their web site? It may also depend on what percentage this money is? £15,000 of £1.5m is not much, but it is of £120,000 when there are two of them needing care. From what you say, if they only have 2 years worth, then it is nearer the latter figure. As your Mother actually says she want to give the money away to prevent it being spent on fees, I think these gifts would mean the state has to pay sooner so it could well be seen a deliberate act to offload money. She has said as much herself. There may be people who come along who know more.

Age UK have a fact sheet (no 40) on 'deliberate deprivation of assets'.

Other things to bear in mind are:

1. Inland Revenue rules on gifts out of capital. Annual sums are reasonably low at about the £3000 mark. However you can use last year's allowance as well as this.
2. You mother must make the gift. Attorneys cannot. Especially not to themselves!

Thank you for replying. The fact sheets are very informative. Now to tell my mum that she can't actually do what she wants with her own money :(