Care Home fee - deprivation of assets

Care Home fee - deprivation of assets

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I have a client in her 90's who is in residential care. Unfortunately, she is now unable to make her own decisions and her son and daughter (both in their 70's) act under a power of attorney.

The client has her own house and other assets, which although less than £150k I total do exceed the capital level for care home funding. The local authority has a charge on the house. It is not intended that the house will be sold because my clients actually returns there to live for occasional weekend, with the support of her family.

The question has arisen as to whether the attorneys (son and daughter) can authorise small gifts to family members. The basis for this is that my client would have wanted to make these gifts if she were able to do so.

We are not talking about major shifts of capital, the suggested gifts are;

£2,000 to her grandchildren who have recently graduated £5,000 to a grand-daughter who recently married £2,000 on the birth of a great-grandchild. Christmas and birthday gifts of £100 each to her 4 Grandchildren and her 4 great grandchildren.

The question has also arisen as to whether the son and daughter could claim reasonable travelling costs in visiting their mother at the care home.

My concern is that gifts of this nature could be seen as deprivation of assets and lead to problems with the local authority.

Has anyone handled a similar case and is their any guidance available as to what can be given away as reasonable gifts? If anyone knows of a book dealing with this subject I would be grateful.

Mark Smith

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By nathanhamill
17th Jul 2007 13:48

Too late...
Sadly, I suspect that it is too late to start making payments of gifts out of the estate, even if the Lady would have wished it - this will simply be seen as ways of reducing the estate in the eyes of the local authority

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By AnonymousUser
23rd Jul 2007 17:39

Enduring Power of Attorney
1. If the son & daughter have an enduring power of attorney it should be registered with the Public Guardianship Office once the donor is incapable of understanding her affairs. This will not mean that the attorneys have to complete accounts for the PGO each year. The PGO only requires accounts where there is no enduring POA in place.

2. I believe that small gifts as suggested in the question would be acceptable for IHT if they fall within the £3000 pa exemptions plus the additional allowance for a gift on marriage. Deprivation of assets might be suggested if there were gifts in excess of the IHT limits but these seem reasonable to me in the circumstances given. However, my experience of lifetime gifts is limited to cases where there was no question of the Local Authority being involved. In two cases regular gifts were made out of excess income and when a property was sold there was an application to the courts to confirm further substantial gifts out of the proceeds.

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By AnonymousUser
17th Jul 2007 13:14

Court of Protection
I'm no expert on this but as I understand it, a Power of Attorney must be confirmed by the Court of Protection once someone becomes incapable of making their own decisions. I suspect therefore that, unless this has been done, the attorneys could be acting illegally.

Once a Court of Protection order is issued, annual accounts have to be submitted to the Court and the primay criteria are to preserve the assets of the subject.

John Perry
Central Business Services
Loughborough
www.centralbusiness.co.uk

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