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Council care assessment and IHT issues

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Tigerlane | 13:08 Sun 09th Aug 2009 | Civil
5 Answers
Background:Mother died 8 months ago. Passed her estate onto Father. 4 offspring and 9 grandchildren. Father has early alzheimers � about to go into Council assisted sheltered home.3 offspring are PoA's. Father has estate of c.�10k cash + property we are trying to sell (net value c.�80k). New home care will be free (until property is sold) but rent will exceed father's pension. Father wants to distribute mother's share of property to 4 offspring (up to �40k) after sale � Council requires property sale within 12 months. Question: Can father carry out his wish without penalty (IHT?) to offspring or breaking rules of care assessment from Council?


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Seems well below IHT threshold.
Others can advise on care home fees
Hi, i am findng it a bit difficult to follow who the house actually belongs to, but here is my (non law-persons) view on what i think you are saying
i doubt it. If the substantial reason for disposing of assets is to avoid care fees, the council can go back as far as they like, without time limit.
If however, the 40k you refer to was willed to the children, then it has not and will never be his, so the assets can be distributed as per the mother's will
Just to note - there is no link between the liability to IHT (or not) and the council care assessment.
You appear to be below any limit that would require to pay IHT but that doesn't stop the council making their assessment in order to pay the care home fees.
You can't now divert your Mum's share of the estate to the children since it was left to Father - unless it was put in trust to the children in the Will giving Father only a lifetime interest in staying in the house. All the estate was left to Father - meaning it will now have to be potentially used up to pay care home fees.
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Thanks to all responses. Sale of Father's property may take place soon and leave Father with c. �90k cash in bank account which we know will almost all be used in care charges/rent depending on how long he survives (currently 85). We know his care is to be assessed on the full amount but he wants to share out some of this figure to his 4 offspring - can this be done without legal complications on the basis the remaining amount he has of (say) �60k + pension is still available to fund his care for the next 5-10 years (hopefully!). We really need to know whether with the withdrawal of captial sums after he enters the care home is OK or agianst any rules leading to issues with PoA's.
I think you should seek a quick advice from a solicitor. It is possible to do a Deed of Variation to mother's will diverting �40k to the children. The legal status of such a Deed is such that it is "read back" into the will, as if the deceased had made it herself. There may be an argument on behalf of the Council to say that dad has "divested himself of capital", however, that overlooks the writing back provisions. I'd be inclined to try it - after all, you have nothing to lose.

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