Deprevation of Assets (Wales)

[HattyHats]

My parents has an interest only mortgage and couldn't afford to pay the capital bit of the mortgage. (I don't know the technical terms). My sister bought their house from them below market value and they still live in the house. This paid of the mortgage they otherwise couldn't afford to pay. This was 2 years ago.

Since then my mum has been diagnosed with terminal cancer.

They sold the house for about 80K below market value. My sister and mum are both now fretting at a time they shouldn't be focused on houses. Will my sister have to give the 80K back or the house? I don't think they got legal advice at the time.

What is it they’re fretting about? Is your mum being assessed to pay for care? Or are they worried about inheritance tax?

They are worried she will need full time care at some point and a friend who works for the council mentioned that selling the house to my sister for less than what it's worth could cause them both problems. Especially as my parents live in the house still.

Yes it will be classed as deprivation of assets.

But every case should be looked at individually. If it was me I'd make contact and explain the situation and why it was sold at less than market value.

@StephenBelafonte is this true even if she didn't need care at the time of the sale and that it was done because my parents couldn't afford to pay their mortgage? It was a way of allowing them to stay in their home.

Also could they argue no one advised them at the time it could be seen this way? Sorry just trying to find ways to reassure my mum.

From age concern
Deprivation of assets means you have intentionally decreased your overall assets, in order to reduce the amount you contribute towards the cost of care services provided by the local authority. The local authority must show that you knew you may need care and support in the future when you carried out this action.

It sounds like that wasn't the motive in your parents case.

I don't think the sale of the property will have any relevance to any care your mum may need as your dad is still alive and living in the property.

Your mum may become eligible for CHC which isn't means tested anyway.

First, I'm very sorry about your mum.

Not sure about Wales but fairly sure it would count as Deprivation of Assets in England. Why did your parents sell it to your sister for below market value? In England you only need to worry about the value of the house if you need to go into a care home. And even then, if your dad is still living in the house, it can't be taken into account.

Your parents really should have spoken to a specialist financial advisor before they sold to your sister. I know that your sister was trying to help and that this wasn't intentional. Hopefully it will be irrelevant and that your mum can get the support she needs at home.

Also could they argue no one advised them at the time it could be seen this way?

But they didn't seek advice...and no ignorance is generally not reason enough to be let away with something essentially.

Maybe they could approach a solicitor now for advice??

They spoken to a mortgage broker I think. But not legal advice no.

@EmmaGrundyForPM

First, I'm very sorry about your mum.

Not sure about Wales but fairly sure it would count as Deprivation of Assets in England. Why did your parents sell it to your sister for below market value? In England you only need to worry about the value of the house if you need to go into a care home. And even then, if your dad is still living in the house, it can't be taken into account.

Your parents really should have spoken to a specialist financial advisor before they sold to your sister. I know that your sister was trying to help and that this wasn't intentional. Hopefully it will be irrelevant and that your mum can get the support she needs at home.

Thank you. My sister was trying to help because they couldn't afford to pay their mortgage after the interest only term had ended. My parents hated needing help and so agreed that they would knock 80K off so that she could benefit after they died. Me and my brother agreed because they weren't in the position to help them. No one knew it could get so messy

How old are your parents? If they’re fairly young and your mum was in good health at the time, they’ll have a strong case that this wasn’t deliberate deprivation of assets.

Both are late 60s. I am confused about the rules because if they had sold at value they would have had 40K each in essence. However the rules in Wales seems to be you can have 50K in savings before being assessed for care. And the bit about motivation - well they were both in perfect health 2 years ago. I know they should see a solicitor. But trying to get them to do anything other than panic and stress is proving difficult. I think it's easier worrying about this than it is to face up to my mum's diagnosis and what it means beyond money

Does your sister charge them rent?

I'm not sure @CavernousScream

Could they argue that the guy who sorted my sister's mortgage should have flagged up issues? Or would that not matter either?

OP,

I'm so sorry you're worried.

They can't sell the house to pay for your mum's care if your dad is alive and still in the family home.

Please get advise, perhaps from the CAB.

No they can't blame your sisters mortgage adviser!

I'm sorry to hear that your mum has terminal cancer. Obviously she won't need care in that case so that just leaves your dad. If you dad does ever need a care home (and most people don't) and your sister is still living in the house the worst case scenario is that SS will put a charge on the house. It won't be sold from under your sisters feet if thats what you're worried about.

No my sister doesn't live in the house my parents do. She just owns it. My mum is so stressed and miserable about all this I'm just trying to help her. Thanks all.