Deprivation of Assets ??

[moonsquirrel]

I would be grateful if you could clarify if this situation might be viewed as deprivation of assets by the Local Authority.

A bit of background:
My widowed mother (86 years) had to sell the family house to buy an accessible flat in Aug 2021 as her mobility was suffering. The house title deeds were jointly in my mother and my brother's names as had been the case from purchase some 38 years prior, but my brother, having fallen out with my mother at the end of 2020, wanted no interest in the proceeds of the house sale and agreed that the whole £180,000 was all paid to her. She bought the Flat in Oct 2021 for £96,000 and gave me my brother’s half share, £90,000 in Jan 2022. I put the £90,000 towards a rental property to help provide income for our household (me, my wife and two teenage sons) as our self-employment had suffered during and after the Covid restrictions.

My mother's mobility has deteriorated and may have to go into residential care in the near future, which would mean selling her flat to pay for it & would then be subject to a financial review by the Local Authority, would the £90,000 that was my brother’s share be included as part of her assets or would this be treated as separate?

Question:
Will the £90,000 which we have invested in our rental property have to be handed back to pay for any ongoing care for my mother?

I would assume not, as it was legally your brothers money that you received?

If there is clear documentation that your mother only owned half the house, then it isn't Social Service's business what happened to your brother's share.

You don't have to worry about this until your mother's savings go below £23k, as that is the point when the Local Authority step in to take on the funding. You will then have to fill in a lengthy form about her financial status for SS, so answer the questions honestly but don't give them any information they have not actually asked for.

It depends on how the money came to you, if you got it from the sale directly you should be ok but questions will be asked if it came via your mother so for example your brother gave it to you mum then she passed it to you.

I think you might be as well to get some legal advice on this if it comes to it. Was house in both their names when sold?

Thanks, the house was in both names when sold but he didn't want any of it. You're right I'll need to seek expert legal advice on this.

We did a similar thing. When my dad died in 2002, my mum put the house into half her name and a quarter each for me and my sister.

She then sold up to buy an accessible flat with on site warden in 2012 which was less than the value of half of the house, which meant my sister and I could take our quarter shares in 2012.

When she needed nursing home care, it was all fine and only her flat was taken into consideration as more than 7 years had gone by.

Edited for typo

When she needed nursing home care, it was all fine and only her flat was taken into consideration as more than 7 years had gone by. Local authorities can look back as far as they wish. There is no 7 year rule.

(There is a rule saying gifts made more than 7 years ago aren’t counted as part of the estate for IHT purposes, but that’s a separate unrelated issue)

Sounds like she only owned half the house so only got half the funds.
So I think you are in the clear.

On the topic of local authorities - I can answer this as I have been through it with my own mum and the topic comes up on mumsnet from time to time.

When my mum was going into a carehome the local authority did an assessment to see if she had to pay and if so how much. They only asked for 6 months worth of bank statements to make their assessment. So anything that happened before that seemed to not be of interest to them. That was in Scotland though.
I did have to fill in lots of forms though re her house value and pensions etc. However if the OP had to do this he would just say owned 50% of property and used these funds to buy flat. So does not sound like there would be any issue as mum did not gift any money at all.

The council will ask for the completion statement. If this shows your mother received the whole £180,000.00 was paid to her and she then transferred half to you then the council will investigate deprivation of assets. If she only recieved half and your brothers half went directly to you without touching your mother's account then it won't be deprivation.

Thank you to all for sharing your thoughts and experience, there are differing views and it doesn't seem clear cut. If anyone else has experienced a similar situation your opinions would be greatfully appreciated.

There is no clear cut answer as every local authority will have its own rules and how much contribution mum is required to pay will also depend on where you live in the uk. Someone posted about £23000 up thread but that only applies to England fir example.

In order to sell the property your brother would have had to also sign the Contract and Transfer Deed. I assume that there must have been something in writing from your brother that he wanted nothing from the house sale and all proceeds would go to your mother.

I’d get a copy of the Solicitor’s file and all related paperwork to see what was said and go from there.

As she'll be paying for her own care for a few years at least I wouldn't get too bogged down with it.

The capital from selling her current property, savings and ongoing pension income will keep her in funds without needing a financial assessment from social work.

If the flat sells for £90k, there will be £67k left for care. In a care home that will last 15 months if she's lucky. And IME you need to apply to SS at least 4 months before you reach the £23k threshhold to give them time to do the financial assessment.

In case it’s useful to anyone else, even if you’re having a LA needs assessment, you do not have to have a financial assessment if you know you’re self funding, despite the impression that may be given by the SW.

I think that's really useful to know, thank you.

Some of the paperwork relating to this are at a Solicitors who are no longer trading so not sure how to get these; does anyone have any thoughts on how to get the paperwork back?

No idea on how to get the paperwork back, however will land registry records show the house was previously owned by two people? Would you be able to get a print off or copy and have it sitting in your file?

This is very important advice. Absolutely only answer the questions posed directly and keep your answers short and factual.

From the info in your OP it seems that your mother gave you ‘your brother’s’ share of the money from the property sale, after your brother gave his share to her. So IMO that’d be clearly within the scope of your mother’s assets.

Assuming you can prove that DM only had 50% title, you are in a very strong position.
I agree with@catofglory 's advice that the time to discuss with her Council SW team is when her funds are approaching the £23,500 mark - so maybe around £30,000.
Her Council's SW may or may not request her bank statements for the period Oct 21- Jan 22.
Some Councils will want to see them, others will not. None of us on this board can say. If you search back Elderly Parent threads on this subject, quite literally, the documentation asked for up and down the country varies.
This is the bit in your OP that I think you need to consider.
She bought the Flat in Oct 2021 for £96,000 and gave me my brother’s half share, £90,000 in Jan 2022.
You might be asked to produce a valid reason why DM held on to all the funds for these four months. It could truthfully just be as simple as DM being incredibly stressed at the physical move, settling into a new place, then Xmas hit and it took until January.
As @Loopytiles says, the money could be viewed within the scope of DM's assets if you can't easily explain.

Do you know the circumstances of the solicitor ceasing trading? Did they amalgamate with another firm. or did they transfer clients' affairs to another firm? Some emails to other local firms asking whether they took over this firms clients might get some info (email rather than phone call is it's more likely to find its way to someone who might know).

As someone said, land registry might show something - it's a few pounds to get a copy of the record.

Did your brother's share go to your mother as a gift to her? Or did it go to her as a simpler way of handling a gift from your brother to you (it might have been difficult to get his share paid to you, but easier to get his share paid to her.)?

No mention of the solicitor amalgamating, so maybe a case of transferred to another firm.
My brothers share was never a gift from him to me, so I presume he gifted to her.

The problem is that if your brother refused his share and gifted it back to his mother then that £90k became hers, which she further gifted to you. So it could be considered deprivation of assets as less than two years later she potentially needs residential care and if her only asset now is the flat that money is going to run out quickly.

Is your brother on good terms with you? Would he be prepared to sign a paper stating he gifted it to you?