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!)

You have to really trust your relatives to do that though. My lovely siblings would have evicted my parents if they had signed their house over to them.

The house won’t be counted as it’s in my friend’s name as far as I recall.

Oh me! Yes both trustworthy children and their families.

I think my parents will do the same though I know my sibling will want to buy me out when the time comes and I’m fine with that.

That’s good to hear!
she purchased it, no one else gets the claim on it

I work in fraud in an LA. Deprivation of capital /assets is really difficult to prove.

Even with social services and the police involved (in cases of financial abuse) nothing has happened. Nobody is going to evict an elderly person from their nursing home/ supported accommodation- the council and presumably the tax payer foots the bill.

Nobody is going to be bothered about £3k though!

Also on a separate note I’d ignore Martin Lewis’ advice re POA being more important than wills. I’ve worked for a solicitors before and it is essential your will is kept up to date and any codicils added when necessary. And the very last thing you want to do is die intestate or have someone challenge the will, this happened with a client of mine and it ate up the vast majority of the estate plus our fees. We also had a suicide victim where we had to sort out his Will and various investments, it was a complete mess, took ages and then the sons complained about how long it had taken! They were not our only client.

I think I'm going to be dealing with care homes/LA soon...😕
Family member aged 79 is in hospital currently. They are medically complex and now very frail 😕
I've done my best over the years, but they now need outside agency input and support.
They only get state pension, AA and 2 very small work pensions.
Its around £1400 per month, I think.
They have approx £30k in savings.
They currently rent from the LA in a sheltered housing flat, which has worked well up to now.
How would this work?
They could self fund for a couple of months, I guess?
Then what happens? They will lose the AA, I think?
It's all happened very quickly...shockingly so.
I know they have given monetary gifts since 2020 - they helped pay for their nephews wedding, bought a musical instrument for their niece, helped their son when his kitchen got badly damaged...
Would that be classed as deprivation of assets? That certainly wasn't their intention!
Their health has deteriorated very shockingly and suddenly 😕

The L.A. will go through all bank statements, you are not able to hide anything. It isn't fair but that's the way it is, unfortunately 😕

She is going to an awful lot of trouble for something she absolutely doesn't need to do, and risking raising questions in your husbands accounts about where the money is coming from. For tax reasons theres only a certain amount you're meant to gift - people do question this! And inheritance tax. This could all be causing a big headache for you guys later down the line.

But, all she needs to do is to remove the money from his name. So all joint accounts etc, make him financially dependent and then they can't touch her money and it comes from the state.

Definitely!

I don't think a few thousand here and there will be of any consequence. The OP sounds quite stressed about it, so maybe not say she could be in trouble. A few grand, I don't think so. Just gifts before they potentially lose all cash to a care home. Sure most people would do that.

Yes definitely need to be cautious. My DMs friends were given a big lump sum towards their house purchase. They ended up having to sell and downsize to repay it for care costs a couple of year’s later when their parent needed to go into care.

And if there is a divorce along the way in the siblings marriage, the house would be an asset of that marriage.

I know if I had been gifted my parents house, by them, my ex husband would have had absolutely no qualms in taking half, in very bitter divorce.

The risks are not worth it.

Depends- they will keep AA if self funded.
If it’s LA funded it will stop after 28 days usually.

I’m in Wales. Nobody is going back to 2020 for those monetary gifts!

Nobody would have forced this unless they chose to do it themselves.

My parents each give my siblings and me 3k a year which means we receive 6k as a gift each year. This amount makes it a gift and exempt from tax. They're not trying to avoid paying care home fees but trying to reduce inheritance tax down the line. It's all legal and has been advised by their solicitor.

The aspect hardly anyone ever mentions, especially when dementia is involved, is that if and when it becomes just too stressful and exhausting (as it often does) to care for the person at home, then being self funding at least means you can choose the time and place, rather than being at the tender mercies of social services, who will typically (because of the cost) wait until relatives are truly desperate, before finding them a place. And maybe not even then.

I heard of someone who became so desperate, she told SS that if they didn’t do something NOW, she was going to take her relative (with dementia) to A&E and leave him/her there.

Only then did they act.

I think a lot of people believe that if you don’t have the funds then you can still choose a care home or amount of visits and the LA will pay. The reality is that if you cannot self fund that is all decided by the LA.
Also self funders can move into a care home before it becomes a crisis situation which is better for all.
However the amounts the OP is talking about are a drop in the ocean. Not many dementia care places are less than £2000 per week

You are permitted to give regular gifts out of income tax free. They I believe have to be regular though.

It will be though as they are married. You know councils have fraud officers?