Financial quandary?

[MarklahMarklah]

I'll do my best to keep this factual, and would welcome suggestions and any advice.

Background
Z is an elderly relative of A & B.

Z had to be moved to a care home at short notice three years ago.
Z owns a property which is currently unoccupied. Standing charges, maintenance charges etc have been paid & continue to be paid.
Z's care home fees are paid from Z's savings.
Z has mental health problems and associate underlying degenerative health conditions.

Current situation
Z's savings are now depleted. There is sufficient money to pay a further 6 months maximum at the current rate.

A&B do not have sufficient finances to continue funding
A&B acknowledge Z's property must be sold to fund continuing care.

Problems

1. A&B currently do not have the same view of how best to sell:

A wants to get a swaithe of valuations and is basing their ideal price on other similar sized properties in the area. B would like to get a range of valuations but considers that the property although is similarly sized to 'good value' sales, it is not of the same standard and would require substantial redecoration. 2.B has been advised that one estate agent has a contact who could pay a higher price for the property if sale to them guaranteed. A wishes to continue to speculate on price.

1. Building repairs are scheduled at cost and this would likely affect the property sale value.
2. The care home is expensive. Z has settled in and feels comfortable. Z's health is not good, and likely prognosis is a decline. The level of decline may be rapid, or slow. This is unknown currently.
3. A wishes to look at the charges of other care homes in/around the same area with a view to moving Z to somewhere less expensive. B agrees that this is an option but is insistent that the homes are visited in person (by A or B) to make sure that the reality tallies with the presented image.[B had previously viewed care homes when trying to find a place for Z]
4. B wants to speak to a financial advisor to see what options are available. A is suspicious of financial advisors and feels that they may steer A&B into decisions beneficial to the financial advisor.
5. B wants to explore funding options for the future to allow Z to continue living at the care home. B understands that one option is an annuity for a fixed period. If Z outlives the timeframe, the care home swallow costs. If Z does not, the care home keep the excess not spent. B would like to obtain further information on this as an option for consideration as it could mean retaining some equity. A is not keen on this idea.
6. A suggests that Z remain in the care home and the equity from the house sale pay for future fees. This could cover a further 4-5 years at the current rate.

What here is essential?
What here is negotiable?
What are A&B missing?

I'm sorry it's long but it's quite tricky and hard to separate out the issues.

Could you not rent out the house for the time being to supplement the remaining savings which may pay for the care home a little longer? Although with only 6 months money left this maybe too late.

Does Z qualify for NHS funding of the care home?

I'm hoping that you are B. You really would benefit from having a proper discussion with a financial adviser who is qualified to advise specifically on later life matters such as this. Z is the most important person here and A will be doing them a disservice by putting their own prejudices in the way of objective planning that a professional adviser can help you with.

Thanks for the replies so far.
The property requires renovation and can't be let out. Even if it could, unfortunately the income generated would cover approx a quarter of the monthly fees required.

I can't see NHS funding/LA support meeting current fees but it is something to consider.

A more detailed discussion with the FA has been mooted, where both A and B can have an opportunity to voice concerns.

One of your funding options is an Immediate Care Needs annuity. They are not cheap, but logically would be purchased using proceeds from sale of the house. The insurance company underwrites Z (so will need detailed health info) and pays the care home directly. This way the fees are met as fully as possible with no worry about having to find more capital sums in the future.

Sunseed I think that is the annuity that was mentioned, would need to investigate further. Thanks for clarifying so it can be followed up.

One issue is if Z has capacity to make their own decisions and if there is a power of attorney already in operation or whether Z makes their own decisions. If Z still has power Z decides not A and B.

Second issue is how long doesZ have to live. If not long then I would keep Z wshere they are and are happy if at all possible even if using every last penny of Z's savings and the house equity. Most people in care homes don't live longer than about 4 years. Z has already been in one for 3 years. If Z has a good chance of living for a long time I would still keep them where they are.

On the house if it could be let out would not the rental income help with the care costs? If it cannot be let out and if Z agrees to sell it then I would sell it quickly at auction to avoid a loads of hassle and doing it up and trying to get a better price and just be done with it. The funds could be.

B's options above seem better than A's.

Xenia , no Z does not have mental capacity. A joint power of attorney is in place held by A & B.
The property is scheduled some repairs by the maintenance company, which are expensive and would need to be offset against sale price.
The property is in great need of modernisation for which there is no current money. Even if it were, rent could provide possibly £1k pcm, against care home fees of (in excess of) £5k pcm.
Z is very elderly with degenerative conditions, but so far, has been in a slow decline. Knowing approx how long they are expected to live, in light of this, presumably affects the cost of the annuity.

Yes, the underwriters will weigh up the medical information and make a judgement about life expectancy. They will consider how much is being asked for annual care costs and do their sums accordingly to arrive at the capital amount they need now to guarantee payments until death. It would make sense for you to at least get quotes for this so that you can make some more informed comparisons of all your options.

That sounds like good advice. The joint power of attorney I think has to be registered with the public guardian office once the person loses capacity but it sounds like all that has already been done.

Renting sounds not possible so it probably makes more sense just to put it up for auction as it currently stands with a fixed date to sell it by and be done with it.

A developer is viewing next week. Apparently they may be willing to pay a little above the market rate to secure the property.