MIL transferring money to DH against future care home costs

[DisgruntledofTunbridge]

Just wanted to run this past people who might have been in a similar situation.

Sadly, DH's dad has been diagnosed with dementia. He's still at a stage where he's basically ok (ish) but occasionally making mistakes with things and was going online and making big purchases that he then forgot about completely. (MIL took away his ability to do this by closing his/their eBay account. Not sure he's noticed yet TBH.) He doesn't drive any more. MIL already transferred a fairly lumpy lump sum to DH for 'funeral expenses' (they are quite traditional) basically to safeguard it from being drained by FIL (should he decide to revert to online shopping again) and that's now in an ISA for them, that DH set up.

Today, MIL did this again - she'd been talking to friends or relatives who had found themselves having to pay for a care home for one of them, because their savings were over the threshold. MIL promptly sent another few grand to DH to 'safeguard' in case care home expenses were needed her end. I gather she did the same with SIL.

I mean, obviously this is all really sad. There's no plan, nothing has been discussed with DH or SIL, they just keep on being given sums of money to safeguard for eventualities.

With my less-involved hat on, I just wondered if there's a disadvantage for DH/us? Is it taxable? As far as I know, on paper it's a 'gift' (except one he's looking after for them). We know about duties payable on gifts of money if both DH's parents pass away in the next 7 years, but are there any other considerations?

Oh, and DH/SIL don't have POA. It was suggested by my mother-in-law a year or two ago and they got a certain way down that track, but then FIL got a bit windy about it and decided he didn't want to proceed because he'd lose control of his money...

(I mean, I say there's no plan, but it feels well thought through compared with the head-in-sand from my own parents who are comparable age and probably into the dementia zone (dad) as well... But just for once I'm concerned about DH's parents, rather than mine!)

This happened to my mum in law who went into a care home during covid with dementia - bad dementia I mean didn't recognise anyone, couldn't string a sentence together or recognise herself in a photo. She was probably in less than a year before she died but there was no bill during or at the end of it. With my dad, he had to part fund but I did all the paperwork - and I detailed all assets and got bank statements ready but no one looked at those, they went with the figures on the forms.

They are 2 different things, giving away money so your estate doesn't pay IHT is not the same as giving away money so you don't have to pay for your own care. Different rules.

they (the council) only sue for it back if they have paid out any money. If they council find out before they start to pay for the res care, (or care at home as well actually) which is a more likely case, then they do the financial assessment as though the person still had the money. Its also possible that they can just cease or limit payments which they are entitled to do and saves court costs.

Transferring the money like that doesn't safeguard it though. If your DH should need care in the future there will be a financial assessment from social care and they go back years and years to look for what's called deprivation of assets. They could require your DH to pay the money back and you may need to pay tax on the gifts if the estate goes through probate. Better to buy a specific funeral plan, one each, which will cost ££££'s. They can only legitimately gift £3000 per year total.

This sounds like small beer to me and unlikely to cause problems. You could do with LPA for health and finances set up in case they’re needed and to do some financial planning.
It could well be that your MIL is acting on the wrong assumptions; are they claiming all that they can in way of Attendance Allowance and Carers Allowance etc? You may be able to seek advice from Age UK.

Theses are such small sums of money I really wouldn’t worry. No one is going to be in trouble.

You all need some proper facts before making decisions and transferring money here, there and everywhere.

https://www.independentage.org/sites/default/files/2025-09/Factsheet-Care-home-fees-Property-disregards-and-deferred-payments_0.pdf

Sometimes home ownership is disregarded anyway

They must have lied about the financial situation then.

Just to make you aware that when people go into a care home the government takes all their pensions to pay for it and leaves them with a token amount for spending money (used to be £20 per month in 2013, probably gone up hopefully). The care home does not supply toiletries and you need to pay for hairdressers. So expecting the taxpayer to pay for people's care home fees is just not a thing, people are always saying this.Nothing is free. I know because my father was in a care home for 5 years and I took care of his finances as an only child.

Makes me smile (or it would if it was funny) the people who think they can get out of using their savings or property to pay for care home fees. This is the system we have in the UK right now, unfortunately, and if you can't pay you could well get inferior care. You could be asked to move out of a home you've settled into if the money runs out.

It's not right, it's not ideal, but with an ageing population and fewer and fewer younger workers contributing to the tax pot, who the F is actually supposed to pay for it all?

We sold my Mum's house to pay for her care home fees. We all felt lucky that she had a property to sell to pay for care in a very nice place with the sherry trolley, lovely garden, good food, well paid staff. What better to spend her money on? The alternative would have been funding me and my brother, both in our 60s and not destitute.

It will be seen as deprivation of funds.

Honestly she just needs to squirrel the money in to an account in her own name. Only accounts in joint names will be taken in to 50/50 consideration or accounts in his name. Unless he needs a care home in the next 6 months it will never be picked up if it’s done slowly

If you have a spouse you can request 50% of private pensions be discounted for their wife/husband

The local authority I work for ask for a few months bank statements and take your word for it

Your PIL can each gift £3000 per annum free of tax. So they could give you £6000 pa without any worry. Above this you’re into the surviving for 7 years territory. And your PIL need POAs… sooner rather than later.

Have a look at the caring for elderly parents section on Mumsnet. Lots of experience and advice there.

I would say that as long as dh and his sis actually hang on to the money, he can probably smile and nod at Mum if it makes her feel better.
If they own their own home, it will be disregarded if mum is still living there. It will only come into play if mum needs care after dh had passed away. It's a shame they didn't sort our poa and tenants in common before dementia. It might not be too late though. We sorted the poa out via a solicitor who was satisfied that she had capacity.
As long as dh/sister are willing to give the money back in the unlikely event that they are down to the last £3k I wouldn't sweat it.

That's good to know. My Dad was on his own though. Mum passed away nearly 20 years before him. He was 94 when he died.

If someone requires care the local authority (LA) would do a Care Needs Assessment (to determine what might be needed) and a Financial Assessment (to determine who pays for it).
Anyone individual with over £23250 (in England) pays for all their own care, between £14250 and £23250 pays a proportion of care costs.
As part of the Financial Assessment the LA can go back as far as they want to see what money an individual has had, where it has gone and when - this is especially key if someone already has a diagnosis because it increases the likelihood of care being needed. If they decide someone has deliberately moved cash to avoid care costs it will be considered deprivation of assets.
It may seem harsh but consider that any money they have over the threshold enables them to buy the care they want, rather than what the LA will pay for.
Please encourage them to seek advice, LA’s often have access to independent advisors who can help guide them through the process.

That’s fair enough. I only found out recently and my local authority don’t tell people and you have to request it in writing so I’m telling everyone

Deprivation of assets that will most likely be looked into.

I’ve worked for a solicitors and one thing we strongly advised if it was needed was POA. It may be worth speaking to a solicitor anyway generally.

Similar story here with aging relatives.
£3k a year can be gifted tax free… do it! whether that is to be spent or saved by who receives it is up to the giver.
make more cash withdrawals and squirrel away that way rather than sending to each child (assumably now over the 3k tax which could cause problems)
POA needs done! Perhaps will have to be only MIL due to FIL Alzheimer’s but def get it looking in to!

A close friend of mine, her DM had to go into a care home. As her DM had savings (unsure how much) the local authority pay a share of the fees and my friend and her sister pay the balance. There is a house in the mix but it was purchased by my friend for her DM and DB who’s autistic to live in. It’s not being sold yet.

The house surely shouldn’t be counted if purchased by someone else unless the deeds were changed to the mums name?

i know of relatives that have signed over their houses to their children in their 50’s so that they can’t be touched.
I think it’s a sensible thing to do tbh! Relative still alive 30yrs later, living in the home! But will not be touchable by anyone.

Would be a good idea to proceed with LPOA for MiL (and your parents) even if FiL is no longer able/willing to sign up.