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?

She wouldn't need LA funding until after January 2026 so it would be 4 years after the sale/money gifting.

As @Mum5net it is impossible to predict how far back the council will want to check bank accounts. In my mother's case they only asked for 3 months, but in other cases they go back years.

When you bought your rental property you would have had to prove where the money to buy it was coming from. This is to do with money laundering.
the conveyancer your mum used to sell the house would have been obliged to pay your brothers share directly to him. So, there will be a paper trail showing his share being paid to his and your mum, then your mum gifting you this amount. The legal team at the LA will be able to trace all this information.
If your mum is still paying care home fees when her savings fall to £23,750, they will certainly investigate. At that point deprivation of assets will be considered. You may indeed have to hand over that money, but it’s likely to be that rather than sell the rental you’d have to pay her fees as if she were self funding.
Sadly, people fail to understand the implications of handing over substantial amounts in later life.

rather than sell the rental you’d have to pay her fees as if she were self funding

Unless she has a spare £4500 a month, which seems unlikely, she'll have to sell the rental to fund it.

This is the worst case scenario, though.
It might not necessarily play out this way
You could leave it all to chance or, OP, would you consider saving the rental income for fees from now onwards?
Remember someone will have to pay tax on the income.

My understanding, which could be wrong, is that the onus is on the local authority to prove that there was a deliberate attempt to reduce her assets. I.e. she knew she was likely to need the money when she made the transfer.

Are you still in contact with your brother? Would he have any documents showing it was his money and that he wanted it to be gifted to you?

In the absence of any documentation, normal practice would be to swear a Statutory Declaration.

In order to do this, you’ll need to gather as much documentary evidence as possible.

Do an exhaustive search for any paperwork… evidence what you attempted to do even if it proves fruitless. Ask your brother if he kept any copies. Copy of Land Registry records. Receipt of monies. Details of the sale. Get it all together and put it in a bullet-point time line of brief paragraphs eg in Year X the property was bought jointly right up to its sale and the distribution of funds.

This may prove very useful to you in the future.

The DM thinks it may be considered deprivation of assets
https://www.thisismoney.co.uk/money/pensions/article-14140879/My-mum-gave-sum-deprivation-assets-care.html?ico=mol_desktop_home