Selling the family home to pay for care - do I have any rights to live there?

[Sunday Girl]

My parents own a nice house in a desirable area and it must be worth a fair amount of money. Unfortunately they are in poor health and it is starting to look likely that they will need to move into a nursing home. As I understand it they will be obliged to self fund their care.

I live with them and am effectively their carer, although I do have a job and contribute towards the housekeeping costs. Do I have any rights regarding continued occupancy of the house if they both go into care? I am aged over 18 and under 60 and am not disabled, so as far as I’m aware I don’t meet the exemptions listed at https://www.ageuk.org.uk/information...-pay-for-care/ to exclude the house from the means test. Aside from the usual worry about the family inheritance dwindling away to fund expensive care home bills, a particular issue for me is that if their house is sold whilst they are still alive I will be made homeless. I would hope that instead a charge could be made against the value of the house to be paid from their estate when they die. Is there any reason for that not to be the case?

Another possible factor is my sister. She lives some distance away with her husband and often brags about how much money they have and has said that she wants to move to this area and buy our parents house for herself. I was expecting us to resolve this amicably when my parents die, as their will appears to leave everything to us equally “my Trustees shall hold my said share of the proceeds of sale UPON TRUST absolutely for such of my daughters XXX and XXX as shall survive me in equal shares”. I’m now wondering whether she can exert pressure that the house should be sold to her whilst my parents are still alive, if they have moved out of it and into care?

My understanding of inheritance tax is that the extra exemption for the value of your own house means it makes sense for the children to inherit the family home and then sell it, rather than to buy it from your parents and then effectively inherit back the money you paid for it. It looks to me as though doing it the second way would potentially make up to £350,000 of the inheritance unnecessarily liable for 40% tax. Am I missing anything?

[Sam101]

As you and your sister are to inherit the total estate when your parents have passed, then 50% of the value will belong to you.

You are correct in that all care costs will need to be met if your parents have assets above a certain amount, so those costs are inevitable. Your sister cannot buy the house without your parents agreement, but, excluding the care costs, will there be enough for you to buy a flat or other property for yourself?

Family disputes should be avoided at all costs as they can be upsetting and very costly if solicitors are involved. Try and speak with your parents and a to protect your interest, it may be possible for your parents to gift 10% each to you and your sister now and register the split ownership in the Land Registry. In that way you all have a registered interest, but that would not negate any care costs which have to be met.

A brief conversation with a solicitor on an initial free chat may be appropriate, but it is a waste of time if your parents are not prepared to help you secure your position after they have passed on.

[twohoots]

Until recently my friend had both parents in a residential home and that was costing £2,000 a week for them both. You mention Nursing, so that is even more costly. They had to sell their bungalow to pay for this but my friend says they got the very best care possible and were very happy. They have now passed away.

Your parents would have to fund their own care by the sounds of it but surely you want the very best care for them. It is after all their home and they own it, even if you do live with them.

The alternative is to get a live in carer for them and that would be a similar cost.

[Sunday Girl]

Until recently my friend had both parents in a residential home and that was costing £2,000 a week for them both. You mention Nursing, so that is even more costly. They had to sell their bungalow to pay for this but my friend says they got the very best care possible and were very happy. They have now passed away.

Your parents would have to fund their own care by the sounds of it but surely you want the very best care for them. It is after all their home and they own it, even if you do live with them.

The alternative is to get a live in carer for them and that would be a similar cost.

I'm not sure how I may have given the impression in what I wrote that I don't want my parents to have the best care or that it should not be paid for. Hopefully they will be around for a good few years yet and my post was based on the expectation that some of the value of their house will need to be used to pay for their care.

It seems that my parents have not faced up to the implications of their needing more care as their health declines as they believe I will be well provided for financially and their house will be sold when they die and that there is nothing more to it. Whereas there actually appear to be two possible ways the situation may develop if/when they go into care:

1) I continue living in the house and a charge is made against its value for their care costs, to be realised when they eventually die and the house is sold and any remaining money is split between my sister and me.

2) The house is sold whilst they are still alive, rendering me homeless and with no immediate access to any of the promised inheritance to help me fund somewhere to live.

Hopefully it's clear why I am concerned about option (2) and looking for some guidance.

[Sunday Girl]

As you and your sister are to inherit the total estate when your parents have passed, then 50% of the value will belong to you.

You are correct in that all care costs will need to be met if your parents have assets above a certain amount, so those costs are inevitable. Your sister cannot buy the house without your parents agreement, but, excluding the care costs, will there be enough for you to buy a flat or other property for yourself?

Family disputes should be avoided at all costs as they can be upsetting and very costly if solicitors are involved. Try and speak with your parents and a to protect your interest, it may be possible for your parents to gift 10% each to you and your sister now and register the split ownership in the Land Registry. In that way you all have a registered interest, but that would not negate any care costs which have to be met.

A brief conversation with a solicitor on an initial free chat may be appropriate, but it is a waste of time if your parents are not prepared to help you secure your position after they have passed on.

As I just mentioned in my other reply, It seems that my parents have not faced up to the possible implications of their needing more care as their health declines as they believe I will be well provided for financially and their house will be sold when they die and that there is nothing more to it. I don't think they would knowingly make life difficult for me by selling the house, but if/when they go into care I'm wondering whether the state/local authority may press for it to be sold. Or that we reach the point where my parents are judged not to have the capacity to make their own decisions and my sister then offers (or demands) to buy the house.

[Sam101]

Have your Parents given Power of Attorney in respect of health and financial matters and if so who to? That would be the sensible step for them if their health is failing.

[Sunday Girl]

Have your Parents given Power of Attorney in respect of health and financial matters and if so who to? That would be the sensible step for them if their health is failing.

I'll have to check, but I'm fairly certain that both my sister and I have lasting power of attorney for them.

[Sam101]

That is good if you have, as if they were unable to manage then you would both be legally responsible to act in their best interests. Therefore if they do need to go into care, the POA would allow you both to deal with their assets to meet care costs and be distributed when they both die in accordance with the Will.

You asked (I live with them and am effectively their carer, although I do have a job and contribute towards the housekeeping costs. Do I have any rights regarding continued occupancy of the house if they both go into care? ), which may depend on a number of matters. How many years have you lived with them?

It may be that you would have the right to continued occupancy but the care costs would need to be met either on a ongoing basis, or by agreement within the POA to charge the property for those costs plus interest. The local authority could tell you more or possibly a solicitor, but hopefully another member on this forum may be able to help.

[twohoots]

I'm not sure how I may have given the impression in what I wrote that I don't want my parents to have the best care or that it should not be paid for. Hopefully they will be around for a good few years yet and my post was based on the expectation that some of the value of their house will need to be used to pay for their care.

It seems that my parents have not faced up to the implications of their needing more care as their health declines as they believe I will be well provided for financially and their house will be sold when they die and that there is nothing more to it. Whereas there actually appear to be two possible ways the situation may develop if/when they go into care:

1) I continue living in the house and a charge is made against its value for their care costs, to be realised when they eventually die and the house is sold and any remaining money is split between my sister and me.

2) The house is sold whilst they are still alive, rendering me homeless and with no immediate access to any of the promised inheritance to help me fund somewhere to live.

Hopefully it's clear why I am concerned about option (2) and looking for some guidance.

Firstly you need to confirm who has been granted POA for your parents. I think both parts, Health and Welfare and Property and Finance are equally important.

Then you need to speak to your parents and see how they even feel about going into care. They might prefer to stay at home with a live in carer, which would allow you to carry on working and living there too.

Read up on Deferred Payments (which I think you mean @ 1). The council fund their care home fees and when they pass away and the house is sold they take back their money plus interest.


Regarding 2) If the house were to be sold now and you were made homeless then you would go to the top of the social housing list or you may enough of your own savings to rent or buy somewhere smaller. Just a reminder here that it is your parents home and you do not have an automatic right to a “promised inheritance”. If the house has to be sold to pay for their care then it’s basically hard luck.

I speak from personal experience here. My parents always said their modest house was to be sold and the proceeds divided between their children and they were very proud to be able to do so because they both came from quite poor backgrounds. However, the house had to be sold to pay care home fees and I will be very lucky if I receive anything at all from their “promised inheritance.”

I have now reached a place where I am glad my last remaining parent spent their last few years being cared for really well in a lovely warm, well decorated place with lovely meals, caring staff and with me visiting most days. OK it cost a fortune but I know they got the best possible care and, at the end of the day, it WAS their money.

Take care.

[Sunday Girl]

You asked (I live with them and am effectively their carer, although I do have a job and contribute towards the housekeeping costs. Do I have any rights regarding continued occupancy of the house if they both go into care? ), which may depend on a number of matters. How many years have you lived with them?

Over 10 years. Started out as a favour to me when I had some relationship and financial issues, then they didn't want me to move back out and I have been doing more for them as their health has declined.

[Sam101]

Thank you for that.

It is unlikely they will both need to go into care at the same time if either of them actually do, but one may go into care and possibly the other later, with you staying on until then.

There is no need to sell the property whilst one or both are in care, as arrangements can be made to pay care costs when they have both passed away and the property sold.

As you and your sister will be the beneficiaries, you should then be receiving capital to help you find other accommodation, but do not rely on the house being kept for you even though part of your time is looking after your parents, who helped you out with accommodation when you were in difficulties until you sorted yourself out.

As a daughter being helped in this way you would be expected to offer some care of your elderly parents as most children would even though you are in employment.

It would help to know an approximate value of your parents assets and if you and your sister both have POA, or neither of you, which would need to be addressed.

[Sunday Girl]

Thank you for that.

It is unlikely they will both need to go into care at the same time if either of them actually do, but one may go into care and possibly the other later, with you staying on until then.

There is no need to sell the property whilst one or both are in care, as arrangements can be made to pay care costs when they have both passed away and the property sold.

As you and your sister will be the beneficiaries, you should then be receiving capital to help you find other accommodation, but do not rely on the house being kept for you even though part of your time is looking after your parents, who helped you out with accommodation when you were in difficulties until you sorted yourself out.

As a daughter being helped in this way you would be expected to offer some care of your elderly parents as most children would even though you are in employment.

It would help to know an approximate value of your parents assets and if you and your sister both have POA, or neither of you, which would need to be addressed.

My parents still seem to be in denial about the likelihood of their needing more professional care at home/going into care, but as doctors and others have pointed out to me they are old and the (multiple) things that are wrong with them only develop in one direction and unfortunately they have both been getting worse of late. They have also been together since they were teenagers and I'm not sure that they would voluntarily agree to being separated (no idea how those sort of decisions get made).

They have now confirmed that POA does exist for my sister and me if it is needed. Regarding the value of their assets they aren't the sort of people to openly talk about this, but I do know that they have more than £46,000 in savings as this was established during a conversation about whether they would need to self fund for care. They also have some shares. I would say that a conservative estimate of their assets would be £75,000 in savings and shares plus another £750,000 for the house, with the real figures almost certainly higher.

[Sam101]

First of all, you and your sister should ideally have a copy of the POA or certainly know where it is kept and what it agrees to as there are different types of POA as already mentioned. One is for Financial matters and the other for Health issues and you need to ensure that both are covered for you and your sister. How old are your parents now?,

As regards to the estate value and possible inheritance taxes, both your parents will have an IHT allowance of £325,000 and residential allowance of £175,000 each, so as long as the total estate when thy both die is below £1,000,000, then inheritance tax will not be payable.

I can fully understand their reasoning and as we all get older we don't like to think about having to go into care or be cared for at out home. We would all like to live long then stop someday without discomfort or being a burden to others. It may take time before they are ready to discuss this further, but if care is needed, at least they have more than enough to meet those needs.

As far as yourself being concerned about having a roof over your head, don't be too concerned, as I feel sure that they would not wish for that and there is no need to be thinking about a need to sell the house for care costs as arrangements can be made to pay this later from the property asset as indicated.

The important thing is that they know you care and are there to help them in there later years

[Sunday Girl]

First of all, you and your sister should ideally have a copy of the POA or certainly know where it is kept and what it agrees to as there are different types of POA as already mentioned. One is for Financial matters and the other for Health issues and you need to ensure that both are covered for you and your sister. How old are your parents now?,

As regards to the estate value and possible inheritance taxes, both your parents will have an IHT allowance of £325,000 and residential allowance of £175,000 each, so as long as the total estate when thy both die is below £1,000,000, then inheritance tax will not be payable.

I can fully understand their reasoning and as we all get older we don't like to think about having to go into care or be cared for at out home. We would all like to live long then stop someday without discomfort or being a burden to others. It may take time before they are ready to discuss this further, but if care is needed, at least they have more than enough to meet those needs.

As far as yourself being concerned about having a roof over your head, don't be too concerned, as I feel sure that they would not wish for that and there is no need to be thinking about a need to sell the house for care costs as arrangements can be made to pay this later from the property asset as indicated.

The important thing is that they know you care and are there to help them in there later years

I've still not seen the paperwork but they say that they did set up both types of POA (Health and Welfare and Property and Finance) for us. They are well into their 80s and you are right that they seem to think that they will be at home living independently until they both magically expire one day, ignoring their worsening health and frailty and the increasing assistance that they need.

[Sam101]

Let things settle down and chill out. It's not the time yet to try and help when they have their own mind set. The time to consider acting may be when the health problem gets to needing care, either at home or in a care home and that could still be many years away.

Age is a funny thing, some people can look very poorly at 65 and others much later in life. I have an Aunt that moved to the Coast when she was 82 and looking like she would not last long. At 94 next birthday, although not walking well, she looks better than when she moved, so only time will tell.

At least your questions have confirmed that you and your sister will be in a position to help if your parents reach a point that the cannot manage, which is a Plus.

Good luck with this and if you need help in the future, do ask questions on the Forum and there are many who can help, even the oldies like me at 81 this week.

Sam