Change of inheritance/property title to allow investment for care home fees

[Cheeseroller]

Hi there

Im hoping to avoid care home fees for my elderly mother - my half brother and I have a 50/50 inheritance of mothers house and savings. I would like to have the house signed over to me so it can be re-mortgaged to fund further property investment to cover care costs. In which case I will need to buy my brother out at the same time. Is this a straight forward legal process? TIA

[Sam101]

Is it likely that your elderly mother will need to go into care? If it is, then the care costs will need to be met and signing the house over you will not avoid this.

If someone intentionally reduces the persons assets - such as money, property or income - so these won’t be included in the financial assessment for care home fees, this is known as ‘deprivation of assets’. If your local council concludes you have deliberately reduced your assets to avoid paying care home fees, they may still calculate your fees as if you still owned the assets.

What would happen to your elderly mother if you did proceed, as remortgage may be a problem.

[Cheeseroller]

Hi, sorry you have misunderstood. Not trying to avoid fees, going to help fund the care costs through investments. Just unsure about the legals involved as I described above.

[DE DOGS]

I wonder if you both can agree to keep the property 50/50 then rent the property that will allow that money to help with the fees.

[Sam101]

Correct me if I am wrong. So mother is staying in the property, which you and your brother wish to have in your names now and that would be a gift from your mother.

It may be best if you and your brother initially owned 50% together with your mother owning the other half, which could be done with a gift now, in Trust with your mother retaining a lifetime interest. Then re-mortgage for capital to buy another property to let for an income.

A solicitor would be best to guide you on this, but there is always a chance that your mother may not need care, in which case it would seem to be unnecessary.

As you mean to pay for care costs if they are necessary, that can be done from the proceeds of sale if the time comes. It doesn't make sense to obtain a mortgage to buy another property to rent when the income is not needed and could cause problems if your mother does not own the property she lives in.

[twohoots]

Hi, sorry you have misunderstood. Not trying to avoid fees, going to help fund the care costs through investments. Just unsure about the legals involved as I described above.

But you said “I am hoping to avoid care home fees for my elderly mother.”

[Cheeseroller]

Correct me if I am wrong. So mother is staying in the property, which you and your brother wish to have in your names now and that would be a gift from your mother.

It may be best if you and your brother initially owned 50% together with your mother owning the other half, which could be done with a gift now, in Trust with your mother retaining a lifetime interest. Then re-mortgage for capital to buy another property to let for an income.

A solicitor would be best to guide you on this, but there is always a chance that your mother may not need care, in which case it would seem to be unnecessary.

As you mean to pay for care costs if they are necessary, that can be done from the proceeds of sale if the time comes. It doesn't make sense to obtain a mortgage to buy another property to rent when the income is not needed and could cause problems if your mother does not own the property she lives in.

Sorry - I will attempt to clarify. Mother is imminently going into care - we will be letting out her house to contribute towards fees. However that income plus her pensions etc are still not enough to cover her fees, hence the idea to purchase another property to ensure all costs are met.

I don't want to sell the property as it was our family home, so I would keep it as an investment - my brother has no interest in it and is not in a position to take out mortgages etc.

My thinking was to have it signed over to me, remortgage it as it is unencumbered currently - pay out my brother his 50% based on current value and buy another property, as previously mentioned, with the remaining funds.

Not sure if I'm complicating the legals with this - just wanted an idea if having the property signed over to me (as a gift I assume) is a straightforward request of a solicitor? I assume also mothers will would need altering etc.

[Cheeseroller]

But you said “I am hoping to avoid care home fees for my elderly mother.”

Sorry my bad

[Sam101]

That's a little clearer and easier to move on. Can you estimate the value of the home at present as this will determine the reply.

Can you also clarify your Mothers mental capacity? If she is to go into care as she is unable to look after herself and or has mental deficiency, then matters can become complicated. Has she given anyone a Power to act?

[Cheeseroller]

That's a little clearer and easier to move on. Can you estimate the value of the home at present as this will determine the reply.

Can you also clarify your Mothers mental capacity? If she is to go into care as she is unable to look after herself and or has mental deficiency, then matters can become complicated. Has she given anyone a Power to act?

I think home is £230K - £260K - mothers mental capacity is good, she is looking after herself ok but we decided it was time to find a care home before it becomes desperate. My brother and I both have power of attorney.

[Sam101]

From a correct procedure point, it would be best for a solicitor to manage this for your Mother to ensure that she fully understands what will happen in gifting the property now to you and your brother in return for you both undertaking to fully fund her future care in a home of her choice. It may be that some change to her Will is required, or at least a new Codicil that would agree with the changes that are intended.

There should also be some protection included that would ensure that in the event of you and your brother defaulting in any way, that you are responsible. You need to understand that your Mother may be in care for many years, (how old is she now), and the costs involved in transferring the property and raising a mortgage will also be your responsibility.

With the value of the property being in the region of £230,000 to £260,000 are you sure that the transaction you are considering will produce income of the amount you need, as any shortfall will need to be met, but the solicitor will be able to explain all the details to you and possibly help with mortgage arrangements.

I hope it all goes well for you and that your Mother will be content in knowing that she is being well looked after by her children.

It would be good to know how the arrangements go when all has been arranged.

[Cheeseroller]

Thanks very much for that info. Mum is 90 next month. I understand all of those commitments. I'll let you know how we get on