What happens if we buy my in laws a home? Care fees etc.

[ooopsupsideyourhead]

FIL has vascular dementia. Diagnosed early October, but things have actually been slipping away for a while - all very well hidden by MIL! They live rurally about 50 minutes away - and just to add to the chaos, MIL has relapse/remit Multiple Sclerosis.

Things have rather come to a head the last few weeks as over Christmas we discovered that FIL has not driven the car for seven weeks - which considering where they live (no public transport, limited shops & services) and the fact that MIL does not drive has rather frightened DH in to making plans (understandably, he has rather had his head in the sand)

FIL keeps finances a closely guarded secret - to the extent that MIL doesn't even know their bank account details or balance and receives monthly "housekeeping" and her own small pension in cash from him. We know we need to sort out power of attorney etc. but we have very real concerns that actually, there's bugger all money left and they are up to their eyeballs in debt. Thankfully we are in the position to be able to buy a small retirement property local to us by extending our own mortgage and we can, once power of attorney is fixed, ensure that any savings/proceeds from their own home are properly saved to put towards the inevitable care payments that are coming. But, we know they definitely won't cover much at all, and definitely won't cover for both of them (apart from MS, MIL in excellent health and a sprightly 60, could easily live another 20+ years).

What happens if the home MIL is living in when the time for her care comes is owned by us? Do we become financially liable for the care of MIL whenever that may be? Even if we can show that all the money they had was spent on FIL's care? We wouldn't have a problem with the difference between what we would pay now and what we might sell for in the future going to MIL's care BUT what would happen to any money we paid now? Are we setting ourselves up to have a massive financial failure?

Thanks :)

I’ve no idea but Age UK definitely will. They have a helpline and were brilliant when my Grandmother was I’ll with dementia and we needed to move her.

My instinctive reply, based on a distracted read of the OP and very out of date accountancy training is:

-don't give them the house (money will disappear into care fees and inheritance tax)

-do charge at least a nominal rent (extra evidence that it belongs to you). You may end up being required to prove that you are not charging above market rent, so do keep evidence of rent valuations from estate agents.

-do get advice. Start with Help the Aged, but definitely pay for advice from a solicitor before getting any way through this.

-you sound very generous :)

Also, if you own the house and can show that you paid for it with your own money (and without receiving equivalent cash from PIL) then it is yours, and cannot be sold for care fees (I'm pretty sure).

Intentional deprivation of assets is when people give away their own money (eg to their children) leaving themselves with insufficient to pay fees.

Thanks all!

@Freidas Exactly! We are trying to avoid any idea that it’s intentional deprivation, mostly we are trying to make our lives easier by moving them to where we live - sounds selfish, but, we don’t want to be haring up and down country roads all the time, and we are pretty sure they don’t have the financial ability to move under their own steam as it were.

If the house is purchased with money you have acquired independently of your in laws and is in your name, it cannot be seized to pay care home fees for them.

But if you were to use monies derived from the sale of your in laws current home to pay for a property which you put in your/your DH name then it would be taken into account when assessing for care fees.

What happens if the home MIL is living in when the time for her care comes is owned by us? Do we become financially liable for the care of MIL whenever that may be?

No

She will financially assessed only on assets and cash in that are in her name.

I would however get proper financial advice before deciding what to do with the proceeds of their property if one if them may need care imminently.

Are you in England OP?

I agree that Age Concern or Alzheimer's society will be able to help you with all these questions.

Please be aware that it may be too late for your FIL POA - it depends on whether he is deemed to have 'capacity'

It is very easy at this stage to take over and make decisions on what you think is best. Try hard to support your in laws with making the choices about their future rather than telling them how it is going to be. Too many people fall into a reversal of roles where you act as the parent and they act as the child (I was one of them)

@flickering yep, we realised that, the plan would be to clear any debt we can with proceeds from their sale and then put the remainder into savings - keeping very tight financial records! I think seeing a solicitor would definitely be a good idea!

Would buying a house be the best solution, renting might be more practical as it is easier to then move again if needed. Also if you are buying will you be eligible for a retirement property?

You should take independent legal advice as these things can be quite complicated, and you don’t want to do something that will put you all in a worse position than you would otherwise be in.

We definitely won’t be doing anything without approaching solicitors, financial advisors and speaking with AC/AUK, this post comes from a discussion over the washing up bowl this evening with MIL. It will be much harder to get FIL on board, but would always have been, dementia or not, He’s never been an amenable person! He is not (I don’t think) at a point where POA is no longer possible, certainly he argues his opinion on politics etc. lucidly enough. At the moment, the main visible effects are irritability (only a little more than usual ) and some slight confusion occasional and physical symptoms such as dizziness, lightheadedness, loss of bladder control and general weakness. But, @helpfulperson we know this could change in an instant so we need to get the ball rolling.

The combination of your fil questionable capacity and his refusal to share financial information is a bit of a nightmare in the making. Will he go along with your plans? If he no longer understands what’s going on will your mum be able to handle her finances or will she hand responsibility to you? Definitely see a solicitor.

if fil is so secretive it is possible they have already done an equity release on the property which means effectively its not theirs any more, they just have a life-interest in living there and will be the possession of the ER company once they pass away. obviously just a guess but it's another possibility to check out.

Assuming they agree to the move then any house you purchase with your money cannot be taken into account for fees.

Any proceeds from the sale of their home can be used to pay debts but if MIL is on the deeds the half proceeds need to be kept separate in her name.

They can then have £23,250 each remaining to have fees paid by the council - for care coming in or a care home.

It could be there's no debts and FIL has a fortune and MIL has pennies. Whatever is in his name remains so and is taken into account for his care.

Try to sort POA ASAP as if you don't and he loses capacity re finances you'll have to go court of protection which is a world of pain.

Any proceeds from the sale of their home can be used to pay debts but if MIL is on the deeds the half proceeds need to be kept separate in her name. This is important. There have been several cases on this board where parents have joint savings of, say, £100,000, father has gone into care, his £50k has been used on care fees, but because the account is joint, LA are refusing to accept the remaining £50k is all mum's, and have continued to regard £25k of it as dad's and assessed accordingly.

I know it's not the point of your thread OP but I'm very shocked that a woman who is only 60 is so financially dominated😕

That is concerning if a couple have joint savings then whatever person A pays for care then person B has to contribute half. Time to separate our savings methinks.