Care fees and deprivation of capital (Scotland)

[WutheringTights]

FIL is increasingly ill and vulnerable and is likely to need residential care in the next 12 months. He owns his house outright (worth about £300,000) but has no other savings. He's in Scotland and expected to stay there for the rest of his life.

Looking into his finances (have recently been given his financial power of attorney) it has become apparent that a year ago he transferred half his house to a local "friend" who he's seen a lot of in recent years. No problem with that, it's up to him what he does with his money, though obviously I'm worried that he was coerced given he's so vulnerable. However, I understand that if the local authority decide that he did it to avoid paying care fees then they will require him to pay fees as if he still owned the house outright.

What happens when he goes into care? I assume that the house will be sold and his half used pay care fees, and the friend will get the rest of the cash. What happens when the cash from his half of the house runs out? We assume that the friend won't stump up the cash to pay his care fees and we can't afford to. Will the local authority pay if no one else will? Will they pursue someone (family? the friend?) for care fees? Or will he be turned out onto the streets?

Any help much appreciated. We're so worried about how he will fund his care and I think he's feeling that he's been stupid which is why I've been given poa to sort it out. Thanks.

Was there any payment by the friend? I think the council can seek to overturn it if not, given that it happened when he was obviously going to be needing care in the very near future.

No payment. He gifted it. Can the council overturn it? Wasn't aware that they can do that. He can pay care fees for probably 4/5 years based on the proceeds from his half of the house but then he'd run out of money. Whereas if he hadn't transferred half the house then he'd be able to pay care fees for maybe 10 years. I'm worried that this won't come to light until the cash runs out and then the friend could be long gone.

Council can't overturn the transfer but they can disregard it in their financial assessment if they can show it was deprivation of capital

Do you know why he gifted half of his property to his friend? How do he and the friend explain the decision? And what’s the legal standing of the transfer? Does the friend definitely own half of his property? Does the friend live in the property and has he been involved in caring for your FIL at all?

The key things that the LA will look at are timing (how long ago did this happen and was there any expectation at that point as to whether your fil would need care) and motivation (see the questions above).

In any case, your FIL is going to be self-funding until his assets fall below the limit for local authority funding (around £24,000). At that point, council funding starts to kick in, whether it’s 4/5 years or 10 years away.

Does your FIL have contact with social care or a social worker handling his case yet?

What are your specific concerns here? Your FIL will not be kicked onto the street (though there’s the possibility that he might need to move homes to find a LA funded place when his money runs out.

Sorry I skipped your questions. I think the first thing you need to establish is the motivation behind the gift, and the legality of the transfer. I’d be interested also in knowing which lawyer did this for your FIL, and whether they gave any advice regarding his capacity to agree and whether he was aware of the implications regarding future care needs and deprivation of capital at the time.

I feel for you: going through similar with PIL in Scotland and a FIL who doesn’t make the most rational of decisions!