Nan's gone into care, Dad wants to buy her house "at a discount" - advice please!

[BlueMonday17]

Hi there, I'm hoping that someone might be able to give me a bit of advice about a sticky family situation.

My Nan has advanced dementia and has just moved into residential care. Her fees are coming out of her savings but pretty soon her house will need to be sold to add to her savings/pay home fees.

My father (Nan's SIL) has suggested he'd like to buy her house for a discount - how much is unclear.

Because of Nan's illness my sister and I, and our DF, have financial power of attorney for Nan. DSis and I think we should act in Nan's best interests and sell the place at market rate. DF disagrees and is being difficult.

As PoA for Nan, do we need to 'declare' details of the house sale to e.g. local council? We're unclear what our legal responsibilities are, and what problems we may come up against if DF gets his way.

We want to do the best for Nan, but also think DF is being daft because he struggles with his own home and looking after DM since she had a stroke (that's another story...). We think he's looking for yet another project as a distraction from actually retiring, despite his own advancing years (nearly 70) and failing health.

Sorry this is so long but thanks for reading. Any advice from legal MNers or anyone who's been through a similar situation much appreciated!

I imagine you're smack on about the care-funding implications of selling the house below market rate.

As you're opposed to doing this anyway, you're probably OK to ask the local council about the situation.

You could phrase it as, you're contemplating a private sale for your nan's house. Does this have any implications for care-funding, and if so what steps would you have to take to satisfy any of their requirements?

(I would guess they will say something like, a written valuation from an estate agent. But that's just speculation.)

Yes, you'd have to declare any assets you'd sold within the past few years, (not sure how long) and selling at under market rate would be seen as deprivation of assets, she would be assessed as having the actual worth of the assets, not the discounted rate.

Be extremely careful. It looks like deprivation of assets www.firststopcareadvice.org.uk/downloads/kbase/3096.pdf.

The bit that I think is interesting for you is...

When carrying out the financial
assessment for care home funding the
council will ask a question similar to: ??Do
you or have you ever owned a property???
If the answer is ??Yes?? and you have given
it away they would then make enquiries
as to the reasons why you gifted the
asset. If it was considered that a
significant reason for gifting the asset was
to avoid paying for care home
accommodation they may treat you as if
you still owned it or attempt to reclaim it
from the new owner.

If they ask you/your Nan if she owned property and the property was sold for a hefty discount as she moves into residential care, damn right it looks like deprivation. It also looks a little worrying because you have PoA and that could look like financial abuse.

However, last time I had dealings with SS was a decade ago so I hope someone that knows more will be along.

I suspect it would be, at best, immoral, and at worst, illegal for someone with POA to use it to benefit financially - and that's what your father is wanting to do. As I recall. From the forms when dsis and I registered to be mum's attorneys, if necessary, financial power of attorney means you have a responsibility to act in the person's best interests - and selling the house for less than it would get on the open market would not be in your Nan's best interests. Your dad needs to understand and and accept this.

It is a really difficult situation, but could you and your sister stand your ground and insist that the house is sold for market value?

I do think that as you have POA and were the house to be sold cheaply to your df then not only could the perceived value be reclaimed but there could be consequences for all three of you. At best you might be deprived of POA.
The duty is to your nan.

I would get 2 or 3 local estate agents in to do a valuation and take it from there. The difference between what you could get and what your father would want to pay could be substantial.

I think your Dad could be on v dodgy ground to profit from POA in such a way.

MrsTerryPratchett's advice is spot on. Very helpful information and I think should answer the OP's query.

Thanks so much everyone, these are really helpful, and have confirmed both my fears and my (and DSis's) view that as PoAs we are meant to act in Nan's best interests!! Problem is that DF is extremely domineering and is likely to continue to bully us in the hope of wearing us down. But I'll look into the paperwork more closely, and that website MrsTerryPratchett - thanks. And hopefully if the two of us stand our ground against DF we can protect Nan's interests.

You have to get the best price as attorneys. Anything else is financial fraud.
The most that you can offer DF is market rate minus estate agent commission.

If the two of you can't 'stand your ground and protect Nans interest' you should resign your power of attorney it is only granted to you because you promised to do just that

I an not disagreeing with the above, and certainly it wouldn't be right for you to do as your father is asking - but I can also see his point of view as in actual fact the most likely outcome is that "getting the best price" is acting in the best interests of the local authority. Your nan will have the same quality of life whatever price you get, the only difference will be how much the LA have to spend once that money gets spent on care. So not at all surprised that selling at a discount is considered voluntary deprivation of assets legally, but if I were nan in this situation I wouldn't blame my son for checking if it's possible and would prefer him to have that small benefit if it were legal.

I worked in a department that used to deal with safeguarding / protection of vulnerable adults concerns. Something like this would have been raised as possible financial abuse and investigated.

I hope you manage to sort it out. Dad has advanced Alzheimer's, it's a hideous disease. Distressing enough without additional strain like this x

I'm dreading this with my nan.

Please stick up for your nan- it's her money and tell your bullying dad to piss off.

Tactically I'd stress the "deprivation of assets" line with your DF not the "we need to protect Nan's interests" aspect. He will be understandably aggressive if you accuse him of stealing from his mum (although that's legally the case) because he (understandably again) doesn't see it that way. Explain about deprivation of assets and don't budge.

Assuming he is going to inherit the house anyway (unless it has to be sold to pay care home fees), then couldn't he just rent it off her for a peppercorn rent and do his DIY project anyway?

Yes, absolutely use the deprivation of assets line with your dad. (I didn't mean to ignore your POA duties in my post above, just think this will be by far the easiest way to close him down.)

If you speak to the council first, you can present him with a fait accompli along the lines of, "The council have said that if we do a private sale, the only way to avoid possible action to recover money later is to have the house professionally valued and sell at that valuation."

It's been a few years since I (unfortunately) had to look into this but My understanding is your too late to do this without causing a problem. There is a number of years (can't remember how many) that have to pass between reduced sale / gifting and the need for funding.
Hopefully the legal side will be enough to put your dad off. If I remember it rightly they can chase the purchaser for the loss.
But take this with a pinch of salt as it was a long time ago I looked at it!

I'm so sorry, Alzheimer's is such a bastard.

He's not the son, he's the son in law

If all the assets are used up earlier than they should be, the nan may have to change care home,

I agree you have to be careful here. Selling it minus a bit for estate agent fees would be ok.

Out of interest though how would a fair offer be viewed legally? My step mum recently had to sell her mums house and money will be used for care home fees. House was valued between ??320,000 and ??420,000 by different agents but the top valuation was way off. I think they marketed it at ??340,000. Didn't have much interest and after a few months sold for ??280,000.

So would a family member have been able to have offered a similar price? Or would that have been seen as deprivation of assets?

I think if a family member matched the price, hopefully documented somewhere, the case could be made that it was true market price.

It's 7 years, referred to by nicole above.

I have no idea about the financial aspect, but my uncle bought my GM's house when she was downsizing and in early stages of dementia, at a substantial discount.

My mother has always resented this because it was detrimental to my GM's finances and her care afterwards. It turned out to be a bad idea for our family didn't help that uncle didn't keep the house to my GP's standards after he bought it, divorced and my ex-aunt has it now.

So I would stick to selling it at market rate. If your DF really wants it, then pay fairly for it.

As well as deprivation of assets and care home fees, there are tax implications with selling at under value and you should get proper advice about this too.

Lots of people think you have to transfer property 7 years before it can be seen as "deprivation of assets" but this isn't the case. It's the reason for the transfer that is the issue, not the timing, although of course if you do it when you know for certain that the person is going into a care home, it would be hard to argue that it was not "deprivation of assets"

I'm a bit puzzled as to why OP's father wants to buy the house at all. Does he not realise that once the lady's savings are used, the LA can force a house sale and use the proceeds to finance her care. Is he thinking of renting it out and using the rent to pay the care home, as that's an option. The govt did promise in their manifesto that there would be a cap of £72,000 on the total amount of care home costs, but have not kept their promise (surprise!) and have postponed this.

Has your grandmother made a Will I wonder. The thing is if the house is rented out and the rent used to pay the care home fees (which is legal) who will the house belong to when your grandmother dies. I think this needs to be sorted. If she hasn't made a Will then her "estate" will go to her next of kin, which isn't the OP's father.

NanaNina DSis and I are also puzzled why DF wants to buy the house. We think it's a completely daft idea. He can barely cope with what's on his plate just now (24hr care for our DM since her stroke 2 years ago, he's also supposed to be winding up his business - furniture restorer, works from home - as he's always saying he wants to retire and he's 68 now).

Really wish that DF didn't have joint PoA with me and DSis. DSis and I also have PoA for DF and DM, although we've not had to act on that yet.

Re Nan's will - she does have a will. I haven't seen it but she told me years ago that everything goes to our DM; my grandfather died several years ago.

Thanks again for the replies, good to know my gut instinct was right on this.