Is this legally ok?

[Parentsworry]

Hi!
Im worried my parents are been a bit neaive.
facts

• grandad got Parkinson’s 10 years ago
• sold his flat for 100k
• paid for his son (my dad) and his daughter (aunt) to change there homes, about 50k
• gifted them the rest. They got poa and lawyer apparently said this is fine as per 7 Yr rule
• ever since dad and aunt take £650 each from him for care and do two weeks each.
• he has about 20k in savings

they can no longer look after him and have started looking at nursing homes.

Have the done anything wrong?

I wonder if anyone has any experience of similar and know how hard they look at these things?

Is he living in his own property at the moment, rented or owned. Is the 650 each per week or per month.

I don't think there is a time limit on deprivation of assets, it is the foreseeability of care needs which is important.

No he lives between my parents and my aunties. They both take £650 per month.
he doesn’t have property, he sold it.

They all really believed he’d be cared for until his end but it isn’t possible now.

But £650 a month all in is peanuts for live in carers, or rent.

He’s getting a bargain, not being ripped off.

I know you don’t think he’s being ripped off, it it’s not deprivation of assets if he has been paying board and care. It would have been double that per week had he been a residential home.

Had he been paying carers to come in to help morning and evening, his money would have lasted longer than in a residential home, BUT that isn’t his obligation either.

£650/month is only £21 per day. That’s not even one hour of a carer.

I think you are worrying unnecessarily.

There are specific annual gift allowances on top of 3k. If the adaptations were fur his benefit(like a wet room) I doubt it will be an issue unless there is cash left over.

Right so one week he lives with your dad, the next week he lives at your aunts. Are both of their homes fully adapted. Is it right that he sold his flat for 100k, gave them 25k each then gifted them all the rest of his money. Where is that money kept, how do they take the 650 each month. Does he have a bank account that his pension and allowance go in with 20k savings and they just draw it out for themselves each month, if so did he agree and authorise that when he had capacity, how did they work out the 650 each month, what's it actually for and covers.

Yes that is how he lives but two weeks at each place. Yes he gave them 25k each. A few years later with dementia diagnosis he used the rest to fully adapt both homes, stairlift, wet rooms, ramps. the money he gave them I know my dad put most into his mortgage debt, not sure about aunty.

yes he has an account with his savings and income both in it. The £650 goes to dad and aunt by standing order. Agreed verbally. Dad has vague recollection of lawyer saying this was reasonable expenses.
Dad was under pressure at work to go into an office so retired early. He sees it as an income I suppose.

If he has a dementia diagnosis the average survival is 8-10 years, so I think you could also argue that he didn't think he would live past 10 years. He made a choice to not go into a home, which is not illegal, and made provisions for his care.

The main thing is he would have paid more had he gone into a home and would have had to sell his property as well.

Thank you. I agree but would love to know that they see it the same way and wonder if my parents need a lawyer?

I think it would be a costly exercise for anyone to take this further, for little to no gain. It would be different had he had millions and was clearly avoiding paying huge sums. It's unlikely he is going to need 10+ years of extra care at the expense of the state.

650 is nothing. The only thing I can think of is when social services do their financial assessment they may ask if the money he gave them was for them personally or to pay for his care. If it was to pay for his care they may ask why they are taking money from his account and why is there only 20k left plus his pension and attendance. They may wonder if the 20k is deliberately below the funding threshold.if he is eligible for council funded care then a social worker and the carehome will need to finalise and agree to the funding.

Thank you. Feel a bit better though it does look like technically they have deprived assets.
would love to hear from anyone who has been through this x

I'd wait until social services do a financial assessment. Your relatives should be keeping records anyway which they might want to see, they often ask for the last 7 years accounts. Are funds available if he does have to pay for his care. Personally I think getting the care assessment done is the priority, he cant continue living in. 2 homes now he's more frail, and falling he needs to be settled sonewhere and they can't continue like this indefinitely.

The payment for adapting the houses he was living in should be absolutely fine. And the monthly payment for board, lodging and care seems reasonable. It's the lump sum gift that might be a problem - out of scope for inheritance tax, but if it was after diagnosis it could be argued as deprivation of assets.

Have they declared and paid tax on the £650 a month each?

Good point, would they have had to declare and pay tax on the gifted lump sum too.are they claiming carers allowance.

So he gave them £50k each, half each was used for home adaptations (no issues there), £25k gift (could be looked at but 10 years out with a £3k a year gift allowance it's only £20k over). The monthly "rent and board" should be ok, £325 a week for care is a bargain. I hope for your sake they will look at the situation and see 10 years of saving the state rather than deprivation of assets but at worst it's the £20k over the gift limit that is questionable. We certainly were cleared as ok subject to the 7 year rule with my grandad, he transferred his house 8 years beforehand, but it was a while ago and in this specific case there was already a developing care situation at the time of the assets transfer.

In all honesty I would come clean with social services that he sold 10 years ago for £100k and used part of the sale money to adapt both his children's homes and has £20k left. I actually doubt they will question this as home adaptations are expensive and 10 years of caring is a lot of burden

My mother has been in a care home (dementia) for several years. Last year her money ran out and Social Services did a financial assessment in order to take over her funding.

They send you an online assessment tool which you fill in and return, adding attachments like bank statements and any other 'evidence' required.

They only asked for copies of her last 3 months of bank statements. I was expecting to be asked for more information (possibly going back years) but they never did.

There is a question about whether your relative owns property, I said no (she'd always rented) but I did not go into any details and they did not ask for any. In your case I would not go into what happened 10 years ago - just answer the questions they actually ask. If they want further info they'll let you know.

(could be looked at but 10 years out with a £3k a year gift allowance it's only £20k over) There isn’t a gift allowance for deprivation of assets. Nor a time limit. The argument around the £50k is that at the time the gift was made, there was no expectation of any need for social services care. I wouldn’t try to conceal the gift, but I don’t see any need to volunteer the information if you’re not asked.

You can’t factually accept a gift of £25k in one transaction and then later on claim it was 10 gifts of £2.5k, one gift each year.

Someone asked about the £3k gift allowance. This only has an implication for inheritance tax. Anyone can gift any amount of money (such £1m) to someone else and if they live 7 years it will not be an inheritance tax issue. Even if they died the day after gifting it the inheritance tax would be due from the estate not the receiver of the gift - the recipient would not have to pay the inheritance tax.

I’d question the £650 a month, was it for providing care, therefore taxable income? Also if he goes in a home obviously the £650 a month will stop - as they will not be providing care anymore, the home will.

It sounds like you could present some of this as follows:

• money for adaptions (if these are things that would benefit him such a s wet rooms rather than eg extensions that provide general value add) - perfectly reasonable without which his family couldn’t care for him
• £650 a month x 2 - his contribution towards all the costs of running two households. Bills, maintenance, food etc.

It might be that the questions asked on the form don't relate that much to past assets, I have a feeling they didn't when I filled it in for my husband. People worry about deprivation of assets a lot, but in this instance, their 10 years of care had been very worthwhile and the money he paid to them has been used for adaptations, you might find this doesn't even come up in the questions.