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Original poster

Deprivation of assets

27 replies

steadywinner · 15/08/2024 17:20

My SIL is struggling with her mortgage, while her DF has got about 800k sat there in investment funds (plus a small flat he lives in that's paid off).

He would like to give her a sum to pay off her mortgage (about 70k) but has been warned by a financial advisor that if he needs care and runs out of money they will check through his statements for any money he's given away.

It seems that there's no set amount of money, or set number of years, on which to base this decision (like there is with inheritance tax) She thinks he should be cautious but I can't see anyone chasing her down for the 70k in X number of years time, given that he would still have hundreds of thousands left to pay for care.

Has anyone any experience of this? Wouldn't it make sense for the government to say "you can't give away more than 10% of your assets within X years of needing care" so it's more clear cut?

OP posts:
WishICouldWinnow · 15/08/2024 17:27

How old is he? Does he have other children he will gift equally?

msbevvy · 15/08/2024 17:29

I agree with you. 70k is a drop in the ocean to him but could transform her life. If he leaves his money sitting there it could accumulate and end up costing even more in inheritance tax. He might not ever need residential care.

Does he have a good pension as well as his investment income? His income alone might go a long way towards paying for any potential care.

SilverHeels · 15/08/2024 17:33

it depends if he anticipated that he would need care. If he was diagnosed with a deteriorating health condition and gave away assets shortly after then it would be different than getting the diagnosis a few years after the gifts.

His age is important as it could be argued that a 90 year old could anticipate having care needs in the near future more than a 60 year old. Local authorities are hot on this.

UltramarineViolet · 15/08/2024 17:34

If he gives away 70K then that would still leave him with 730K in savings which would buy care for a good number of years should it be needed

Deprivation of assets would be more applicable if he gave away the majority of his savings

He just needs to make sure it is all clearly documented that it's a gift to his daughter

Bromptotoo · 15/08/2024 17:43

Deprivation is mostly about intent.

If he gives away £70k so as to qualify for help with care it's an issue.

Given his total wealth isn't far short of a million I don't think he needs to worry!!

Original poster
steadywinner · 15/08/2024 19:29

I agree. Friend is 51, DF is about 76 and in good health.

OP posts:
Original poster
steadywinner · 15/08/2024 19:30

I think she's worried because there's no hard and fast rules, it's just "they might come after you for money at a later date IF he needs care and runs out of cash".

OP posts:
PosiePerkinPootleFlump · 15/08/2024 19:38

Yes it’s true there are no hard and fast rules, but if a financial advisor is flagging this as a significant risk when he’d have £700k+ of other assets and is planning on giving away <10% I’d be questioning the competence of his financial advisor tbh

Weiredeout · 15/08/2024 21:08

He should go ahead sil could keeo her morgage savings ready just in case. Because she would probably save say 50k on the interest and get interest in the next x yyears before her dad does deteriorate

Changingplace · 15/08/2024 21:13

As the £70k isn’t the majority of his money and doesn’t leave him likely to struggle paying for care, should it be needed I don’t think it’s a reason not to do this.

Tulipvase · 15/08/2024 21:18

I’m not an expert but it seems to me that D of A is a term that’s bandied around a lot on here but I’m not sure it’s all that common or easy for a council to prove this was the intention.

MilkyCappuchino · 15/08/2024 21:18

A situation where the government will take the million for just care and leave nothing to the kids....Sometimes you wonder which country is better living in

Bobbybobbins · 15/08/2024 21:29

I think given it is not a huge proportion of his money that they should do it. If it was every penny he had that would probably be seen differently. If he were to need care then he would have a big amount left.

I would suggest that while these conversations are taking place it might be a good opportunity to speak to him about his wishes if he did become ill.

ForgettingMeNot · 15/08/2024 21:57

If his financial status is as you say, £70k is nothing to worry about as he has enough to fund care should he need it for years.

Mossstitch · 15/08/2024 22:11

As far as I'm aware if there is no life limiting diagnosed condition when the money is gifted then it is not relevant for deprivation of assets as requiring a care home is not expected at that time. ( I have worked alongside social workers in a hospital with elderly patients requiring care homes). It is actually a very small percentage of the population that end up requiring a carehome, there is every possibility that it will never happen and if it did then friend's father did not know it was going to happen at the time he gifted the money so could not be seen as depriving himself of assets on purpose.

startstopengine · 15/08/2024 22:18

His financial advisor doesnt want to loose their interest on the investments, it's awful advice.

If he had 80k and gave 70k then yes that would set off alarm bells.

But with his wealth they should 100% go ahead.

Tryingtokeepgoing · 15/08/2024 22:57

PosiePerkinPootleFlump · 15/08/2024 19:38

Yes it’s true there are no hard and fast rules, but if a financial advisor is flagging this as a significant risk when he’d have £700k+ of other assets and is planning on giving away <10% I’d be questioning the competence of his financial advisor tbh

Well indeed - and if not their competence then their motive. I suspect the advisor is more concerned about the ~10% drop in their fee income that will flow from a ~10% withdrawal!!

lapochette · 15/08/2024 23:11

Agree with posters who question the motive and competency of the financial adviser. Go ahead and do it, what's the point of sitting on 800k if you can't help your family when they need it.

Original poster
steadywinner · 16/08/2024 07:14

I did wonder about the financial advisor wanting the money to stay where it is, I assume he gets a percentage of what's in there?

OP posts:
Harassedevictee · 16/08/2024 19:40

@steadywinner Based on the information provided I can’t see this being an issue for DoA. I suspect in addition to his property and savings he has an income as well. Should her DF need care in the future it will take quite a long time to reach the point of having spent all his assets on care.

Happyher · 16/08/2024 19:45

Surely he can spend his money how he likes if he has no need for care now. I know UC rules on deprivation states ‘ deliberate deprivation in order to obtain benefits’. Not sure how it applies to care costs but that is not what he’s planning. What would happen if he decided to give £70,000 to charity. Would a council chase a charity and demand the money back??

MikeRafone · 16/08/2024 21:44

Keep all the paper work, keep the bank statements and final mortgage payment and put them away safe. That way you have proof it was a guft to help out pay off the mortgage in hard times.

as pp said it’s about intent to deprive yourself of asserts - which is not the case in this event

hatgirl · 16/08/2024 21:51

I'm a social worker and our financial assessment team would in no way consider this situation as deliberate deprivation of capital if it ever came before them.

Which it wouldn't because he still has more than enough money and assets left to pay for his care without having to ever disclose any of his financial matters to his local authority.

safetyfreak · 18/08/2024 14:58

startstopengine · 15/08/2024 22:18

His financial advisor doesnt want to loose their interest on the investments, it's awful advice.

If he had 80k and gave 70k then yes that would set off alarm bells.

But with his wealth they should 100% go ahead.

This,

I am also an adult social worker and its unlikely with his wealth, your father would ever require adult social care fiancial support. Your father will be self-funding his care. If, by some chance your father does run out of money...it would be years, maybe a decade down the line and the FA team would not see it as a deprivation of liberty.

Your dad should be helping his family when he can.

FindingMeno · 18/08/2024 18:58

I agree that he should go ahead and gift the money.
If D of A was as loosely defined as some are worried about, then surely none of us should buy big ticket items or gift any money past the age of 60.