Protecting property if parents go into care

[Abwettar]

Hi, I'm wondering if anyone can give me some insight regarding protecting my parent's home from care home fees?

The current situation is that I am an only child, there is no other family. Aside from the house, there are no other assets. My parents have joint ownership of their house, worth around 100k, and are both currently living there. They are both in poor health, my dad has been diagnosed with terminal cancer and my mam has been diagnosed with dementia - however they both have capacity to understand the situation at the moment. They have always been adamant on me getting the house after they pass.

There are no plans for either of them to go into a care home, I would like for them to stay in the house as long as it's safe to do so, with care from myself and carers going in throughout the day.

I was looking into putting the home into a trust, but I have read some conflicting information on if this would be considered deprivation of assets due to their poor health.

My question is, if both my parents were to make a will and each leave their 50% share of the house to me, would this protect at least part of the house? For instance, if one of my parents passed away, would their half of the house be protected from care home fees, even in the situation that the other parent had to go into a care home?

Any advice on this situation would be greatly appreciated

Thank you

Why shouldn't they pay for their care exactly?

I came to say: just pay for care, but actually reading your OP you’re not really asking about deprivation of assets, you’re asking for appropriate estate planning giving either parent may need care.

You should do what you say re Wills. While they’re alive their house is fair play for care fees, but once they die then what they each have left should go to you, and not to the other so it doesn’t get swallowed by the other’s potential care needs.

Your Mum will need to be assessed for capacity first to ensure she can make a valid will given her dementia diagnosis.

If sold for market rate as my original post then the parents would have the money which they may need to spend on care and the op would have the house. The parents have the same value of asset as before just in a different form. It depends on whether it is the house that is important to the op or the financial inheritance. Agree they may be no way to protect that.

OP, your parents care is not the responsibility of the taxpayer.

Get some good financial and legal advice OP - you may have left it a bit late but I certainly have no intention of paying inheritance tax - bloody stealth tax - and neither will my children. There are legal ways around it, thank goodness!

Why should 'the tax payer' pay care for some people but not others?

Everyone should have the same cradle to grave care.

It shouldn't be down to luck of the draw who gets their savings and investments wiped out by ill health and who doesn't.

The seriously rich will pass plenty on, big gifts, moving money on to dodge inheritance tax but people with modest amounts of savings aren't allowed to dodge the dementia tax.

Maybe the tax laws should change if you have more then than inheritance tax start point you pay your own care, £300k or whatever but less than that the state pays.

You can avoid IHT if you give most of your assets away before you die but you can’t avoid your home being taken if you go into care. They can only go back 7 years for IHT, but there are no limits for deprivation of assets.
I am another one who is sure the OP is more concerned about her inheritance.
We cannot tax working people more just to let some people inherit.

On the recent previous thread on this I worked out if every Working Age person paid under £2:50 a week they could pay for all the 300,000 needing care homes. ( ( Currently our taxes pay for 50% with the other 50% self funded. )
That would then effectively take the burden off local councils and effectively reduce our council taxes.
The younger 18-64 yr olds making up one third of those needing social care with 97% financed by our council taxes would still be locally funded ( I couldn’t cal their figures as there’s nothing reported )

With the saving on council tax bills I personally would prefer them to keep the money and spend it elsewhere as local areas are in dire need.

With the growing numbers of non pensioners needing care year on year and 97% locally funded we desperately need a long term plan to pay for this.

Just a thought.

Terminal cancer is unlikely to result in a care admission.

So it's likely he'll die first & your mum will inherit his share. He could make his will so you get his share.

But dementia is the most common reason for a care admission.

Do you know what care for advanced dementia is like? If she becomes a 'wanderer' she will need 24/7 supervision. Will you be able to provide that?
Sure, home carers can come in 4x a day (this costs too!) to do dressing, medicines, meals & toileting. But will you be able to do these tasks out side these 15 minute slots?

There's also the issue of sexual & violent behaviour that often occurs with dementia. Will you cope if your DM starts 'touching' herself in front of you or other similar behaviours?

Also you need to think now how well the house is adapted for their needs eg is there flat access? A downstairs loo? A downstairs sleeping area?

Often people can't be discharged from hospital home because these things arent present.

With an LPA, the attorney has to act in the best interest of the person they are acting for. Changing ownership of their property to TIC would put them at a financial disadvantage so wouldn’t be allowed.

@Soontobe60 I've not read the whole thread so this may have been covered but would becoming a TIC really not be allowed by an attorney?
I get that it would reduce a surviving partner's estate but if it were in line with their wishes re inheritance surely this shouldn't be prevented ?
And would there be any tax implications that might be to the surviving partner's benefit?

I do have problems with this idea.
Firstly why should working people be paying anything just to stop other people losing their inheritance?
It might just be £2.50 a week now but for a lot of people on MW this amount is significant.
£2.50 a week will soon grow as more people go into the care system. That is how all taxes start - low at first then rising.
I am in my early 70s and I have come to terms with losing my home if and when I need care.

People aren't being up their own arses, they just can't see why you think anything you've said makes your case any different from everyone else paying for care.
My aunt and uncle's story was identical to yours. The uncle died in hospital and aunt needed 24 hour care my cousin couldn't provide without giving up her job. Her DM had lost capacity by the time she went into a care home. My cousin told her DM that it had all been sorted, that she would inherit the house. My aunt was happy with that. She never knew the house was sold long before she died. There was no need to tell her. The only one it affected was my cousin.
I dont see what your problem is with them using their only asset to pay for care is, unless it's really more about your wish to inherit.

I think we have 2 main choices to funding care:

• those who have the means to pay, pay (as now)
• we increase taxes / NI to cover all required care

If we moved to the latter, the non workers who don’t contribute now would still not contribute, it would just be the contributors paying a little more each to share the burden between them, rather than just those who need it.

Right now though, we are in option 1 so we have to suck it up until something changes.

My thoughts are on either an insurance scheme or a centralised Govn run scheme. Or just a simple tax.

Obviously it’s more money going out but the current system isn’t sustainable. We only have to look at the state of local councils.
Its also worth noting in the NEast only 17% are self funders so their councils are really suffering. If the tax / insurance was centralised the available funds could be spread out to meet all councils needs equally.

Of note it’s worth considering that
Financially
currently home ownership is reducing per capita so more people will be funded for care by taxes ….that’s an increase in the tax burden

Those who inherit because they will exceed the lump sum allowance lose benefits……that’s a long term saving.

A centralised system reduces costs to Social services

Morally
Self funders currently pay on average ( figures based on average payments by councils and average by self funders as of 2023 published data ) £35,000 per year more than tax payer funded people ( that’s just 65yrs plus ) That average amount is used to prop up the council underfunded residents. That is immoral.
A centralised system means everyone is treated equally
A centralised and equal system is what the Welfare state was created for. Everyone equal cradle to Grave.

No one likes paying taxes but we all pay them to support others even if we never use them ourselves.

The current system is unsustainable but if anyone else has any ideas with the current numbers of all people requiring SS on the increase year and year and the number of home owners and those with high savings reducing then happy to stand down.

I’m a working age person and happy for a new tax or scheme to support everyone of all ages who need extra support.

I agree with you. But I don't agree with any flat rate tax, all tax should be income or asset related.

Basically, tax needs to increase. And people who inherit should pay more IHT, that can be one part of the increases.

Agree.
There needs to be tax increases.
There needs to be something realistic, a long term solution that everyone pays into. No get out clauses.
I disagree with IHT increases though. I’m used to £0 in Guernsey though so UK ones are very high. Reduces incentive to save and invest all of which makes money for the tax man etc….long term thinking rather than short term sticking plasters.

This situation where the parents want to pass on inheritance to their family is one of the situations that is envisaged by those opposed to assisted dying

None of my savings or investments make money for the tax man, it's all tax protected. Over £200k in ISAs, £600k in pension (ok, tax to pay when drawing most of that), £50k in premium bonds....it's very easy to shelter money from tax. I did pay some tax on savings last year, maybe £200.

I don't think our IHT is high, in many cases you can have £1m before any tax is paid at all. I think it's extremely generous.

The money is invested when it sits in those accounts though.

Yes. But that's not helping the tax man.

Most local authorities no longer own any care homes, so LA funded residents are in the same homes as privately (self) funded people, with the same standards of care.