Capacity assessment needed. Has anyone experienced this?

[confusedmate]

Mil gifted us a few thousand a few years ago. This was when she sold her house. She's now in a care home and the solicitor dealing with our house we're buying said she needs a capacity assessment otherwise the sale can't go through. She has enough funds for her care home for a few years. If it came down to her running out we'd have the sale of our house or we'd have her live with us.

Has anyone been through this? She desperately wants us to move too as our area isn't brilliant. She has mild dementia but is definitely with it regarding finances etc.

Thanks everyone. I was wondering if anyone else had been in this or a similar situation?

Hopefully we'll have more idea tomorrow?

I think the solicitor is concerned that the gift of 50k constitutes Deprivation of Assets, and he's right to be concerned.

If your mum runs out of money to pay for her care, the local authority will look at her finances going back at least 7 years. If they believe that she deliberately gave away her money so they have to pay, then they will come after you for that money.

If she gave them the money to enable them to buy a house, then she does need to sign now to prove it’s a gift.
OP, how much money does she now have?

I wonder if it's to stress test you if the money had to be returned. I know with DM we were told (a few years ago) that they could look back seven years for 'gifts' that might be seen as deprivation of assets. Care home fees locally are £7,000 per month. I can't imagine yours are much cheaper . Do her assets cover that for 7 years?

There isn't a 7 year rule. Local authorities can go back as far as they need to if the suspect deliberate deprivation of assets.

The 7 years thing is unrelated and is to do with inheritance tax.

It's around 3k a month for her care home. The 7 year thing is afaik if someone dies within 7 years then there's inheritance tax to pay.

So the care home is approx £156k per year and that will increase year on year as it will increase over time. How many years would she afford to pay for care for?

As I said upthread, it's not unheard of for people to live in a care home for approx 10 years so that is a lot of money.

How is her cognition? Is she still able to manage her finances?

Rereading your post you say she is 'with it' with regard to finances. Grasping at straws here but maybe the solicitor wants the capacity assessment to show she is still in agreement with her decision and still has capacity.

Bit odd though as whoever was a witness to her signing to say it was gifted should be enough.

Maybe talk to the solicitor again as maybe they are concerned about deprivation of assets later on.

3k x 12 isn't 156k.

We'll see what's said tomorrow. Hopefully it'll become clearer?

@confusedmate ah sorry i misread and thought per week (which isnt unusual dependent on where she lives). Apologies.

Yes she knows how to manage finances. She doesn't have much to worry about now though. She does want to pay the carers a bit extra and we've told her they aren't allowed. She can get them some treats at Christmas. She's been so independent until recently.

It's ok.

The home is amazing. Really great staff. Lots going on. We were thinking of having her live with us and may do if she wanted that but tbh she gets good care there. I know of plenty of awful care homes. Friends have worked in them and had to whistle blow. This one is like a big family. You can feel it when you walk in.

It's been very stressful making the transition. Then emptying the bungalow and now this. Life can get hard as you age though worrying about parents etc. But life is hard.

Yes yes. Pretty sure this is well understood but the OP has clearly stated that MIL has plenty of money to pay for care so that suggests it will be many years before the funds run out.

It may go back to the 7yr rule, if you gift a large amount the receiver pays tax on it as an unearned income I believe. But check this, also if she was lucid and still lucid they may want reassurance the large amount was given willingly and her decision was made at a time where she had full capacity. It's a process of safeguarding a person's assets , they want to make sure financial abuse did not happen.they have a duty of care towards her and just probably want to make sure, she was able to make such decisions, I a m sure of that, it's worth asking them on what grounds are they acting upon .hope this sort of helps

The only person who wanted proof of funds was my mortgage provider, I don't understand why a solicitor would go through 3 years of statements and ask what one large deposit was for or who is was from. Presumably her bank were happy at the time.

I think because she's in a home they're saying it' could be depravation of assets. That's all we can think of.

Just interested if you want to share what the solicitor said

They've said we need a letter off the dr stating capacity. Asked if any other beneficiaries. He's the only one.

Said previous signing doesn't count as she may have changed her mind.

Bit late if she has changed her mind, why doesn't he just go and ask her himself.

I know. She hasn't changed her mind.

It sounds like he is concerned about financial abuse and whether to report it to the local authority and OPG to safeguard your MIL.
However, it is not your responsibility to arrange a retrospective capacity assessment (yes, they are a thing). This is something that OPG may not may not do if they believe the concern needs to be investigated. They could also contact medical professionals for information about your MIL’s diagnosis and whether she is likely to have had capacity at the time the gift was made.
I would ask the solicitor for clarity as to why he is asking you to arrange this, and to be transparent about the fact you believe your MIL had capacity to make the gift. However, you should expect further investigation and accept that the sale may be significantly delayed.
If your MIL has a significant amount of capital, it’s less likely that the local authority will be concerned about deprivation of assets at this stage. If her funds deplete to the extent she requires some state funding, then they are likely to get involved.

Worth noting that if your mum has capacity to make the decision and confirm that the decision still stands, it’s unlikely to be a real problem!

Capacity is specific to time and issue. What decision exactly does he want to be sure she had or has the capacity to make?