I am in the fortunate position of being able to buy my elderly increasingly infirm parents a flat in a wardened complex near me. The plan is to move them in first and then sell their house when they have moved out to avoid the stress of having to decorate it etc when they are in situ.
We are buying the flat in my name and had planned to charge them rent - the reasoning being that if it was in our names they couldn’t be forced to sell it for care fees in future and also reduce the amount of their savings
We have been given conflicting advice about this - one suggestion is to transfer it to their name to avoid capital gains tax in the future when sold and also get them to ‘pay back’ the cost of the flat to reduce their savings that could be used for future care fees.
Any thoughts anyone?
Thanks for the reply - the question is I suppose whether paying rent or paying back a loan could be seen as a deliberate DOA ?
This is a very short term move, and not worth all the upset and work involved. It would be much better to do everything possible to stay in their existing home until they have no option but to move into nursing care. Tell us more about your parents and we might be able to make a few alternative suggestions. How old are they, what is wrong with them. Do they have over £46,000 between them? Yes/no is sufficient. Is their house disabled friendly? Power of Attorney arranged?
Parents mid / late 80s - Mum limited mobility Dad increasingly so. Current house unsuitable even with mods. Live 4 hrs away hence moving them closer as having to spend increasingly longer periods of time driving over. Both keen to move closer to us. Have POA. Over 46k savings
They are def moving so pls dont spend any of your valuable time thinking of alternatives. The question is how to arrange finances now bearing in mind Deprivation of assets rulings.
What is happening to the monies raised by the sale of your parents property? Unless it’s there’s still an outstanding mortgage to be paid of, or repayments of equity release to be made, then your parents will have the value of their house at their disposal, albeit in “cash” rather than bricks-and-mortar. This would then be used to pay care fees in the future, if required.
Deciding how best to manage the care needs is always a complicated issue.
Here is a very rough summary.
I would urge you to consult a community care lawyer to avoid any nasty surprises later.
I helped my mum go through end of life care, and I’m currently making arrangements for my own house to protect it in future.
Elderly people don’t find it easy to change, that is why staying put and arranging extra care is always the best option IF it is appropriate.
If it isn 't, then there are a different set of things to consider.
As you have raised the issue of deprivation of assets, presumably you would like to preserve their assets as much as possible?
Social Services will fund support only when assets go below about £46,000 jointly.
So if they sold their home, and you bought them one, that would leave them with savings way over that amount. With nursing home fees in my area now at over £1,0000 a week, for one person, if they both ended up needing nursing care their savings might be reduced by £100,000 a year!
However, if they bought a house more suitable for their needs, at a location of your choice, so that they were left with under £46,000 a year, SSD would fund some of the care needed.
If one parent then needed residential care, the other didn’t, at any stage in the future, then the value of the house would be completely discounted, as one of the couple was still resident.
If you contributed to a portion of the value of the new suitable house, and that was legally recorded, the value of the house might be discounted even if both parents went into care.
However, if you bought your parents a flat, in your own name, Social Services would expect your parents to sell their house and fund all their care until their money was down to £46,000.
I have had experience in the past of warden assisted care, a warden with “keep an eye” on someone, but generally speaking not provide actual care. Be clear on what care is available.
Thanks for the replies. We decided to buy the flat as we had the cash and they would have found it hard to cope with the stress of having to sell their house first and they need to move ASAP.
As pointed out, this leaves them with the cash from eventually selling their house. The choice is now
- register house in their name - get them to pay back the money we spent on it.
- keep in our name and get them to pay rent on it. Keep renting to others after they have gone
Both options might have issues around DofAs . We are of course getting other advice on this Not really concerned about preserving assets - just want them to have some stress free final years …
Of those two options, definitely them ultimately buying it would be my choice, maybe with a “bridging loan” from you. Do you have any brothers or sisters who would like to express a view?
Hi BB - yes them ultimately buying it seems to be the consensus - many thanks for yr input
I hope it all goes well. Can you keep us posted on your progress?
My mum was a hoarder, it took us - me and my two six foot sons, a whole year to empty out her house. She was an Ercol collector, bought, but never quite got round to selling. Over 60 dining chairs and 10 dining tables to start with…!
Even worse, as she was in a nursing home, we had to get approval for prices of everything, complete nightmare.
I would suggest you decide roughly how much they will get in their flat, as soon as possible and be firm about all the other things they will want to take too.
Mum absolutely insisted in taking all her clothes her wardrobe in the home was absolutely rammed full. She never wore any of them!
I am currently drastically reducing the amount of my own “stuff”. Eldest son lives here (together with our steam engines which live in an engine house at the bottom of the garden). I am determined that when I die, he will be able to sort my stuff very quickly indeed. I don’t want to do to him what mum did to me.
Firstly, I think the kitchen cupboards need to be decluttered. Only need the basic if your parents will not be cooking. Or unlikely to cook in the future get rid of the dozens of oven dishes. And all the crockery they had for years.
See what they can actually handle. I got rid of all the large dinner plates. I suspect they have their favourite cups etc. And haven’t see inside some of the cupboards for years.
Make sure they understand that there needs to be a clear path way. In their new rooms so when they need to use walking and equipment. There are no obstacle courses to manoeuvre and no rugs etc trip hazards. It very hard to get people to part with things once they have moved in.
Your parents will need good lighting. Some housing scheme have terrible lighting. I have a balcony which blocks part of the lounge area. And can make the room dark. And the balcony is south facing.
If they are going to live in a large building. And will have large distances to cover to reach the apartment etc. They may need walkers. Some people can underestimate the distances from the car park to apartment. And especially if shopping needs to be take in.
When I was clearing a lot of things out, I used Free cycle and gave lots of other things to a local charity helping low income families, and serviceable clothing to the Salvation Army which dad always supported. Everything went to a new home so someone else could use them. So much better than landfill.