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What counts for care home Fees?

including wills and probate
Dod101
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What counts for care home Fees?

#351840

Postby Dod101 » October 29th, 2020, 9:43 pm

My daughter has a friend whose 80 plus year old mother is in a care home with fees paid by the Local Authority. At her age, she has just been left about £100,000 from a friend. The daughter has a POA for her mother. She is concerned that this money is going to turn up in her mother's bank account in the next six weeks or so and not surprisingly, she does not want the Local Authority to get its hands on it but neither does she want to break any laws.

First question is does she need to disclose it? Secondly the mother has never had any assets and does not have a Will as far as anyone knows. If mother does soon with the money intact, as the husband died some time ago, presumably the estate would be equally divided between the siblings? That seems to be the intestacy rules in Scotland. I do not think the daughter is seeking to do so but could the funds legitimately be diverted to the siblings by the daughter using her POA?

Not my problem but it is a real life situation. Any help/opinions would I am sure be much appreciated.

Dod

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Re: What counts for care home Fees?

#351845

Postby Lootman » October 29th, 2020, 10:01 pm

Dod101 wrote:My daughter has a friend whose 80 plus year old mother is in a care home with fees paid by the Local Authority. At her age, she has just been left about £100,000 from a friend. The daughter has a POA for her mother. She is concerned that this money is going to turn up in her mother's bank account in the next six weeks or so and not surprisingly, she does not want the Local Authority to get its hands on it but neither does she want to break any laws.

First question is does she need to disclose it? Secondly the mother has never had any assets and does not have a Will as far as anyone knows. If mother does soon with the money intact, as the husband died some time ago, presumably the estate would be equally divided between the siblings? That seems to be the intestacy rules in Scotland. I do not think the daughter is seeking to do so but could the funds legitimately be diverted to the siblings by the daughter using her POA?

I have no idea about any special rules that might apply in Scotland, but I think any attempts to defer or divert these funds in order to retain LA care home reimbursements are fraught with risk.

This sounds like a similar situation to where someone is an undischarged bankrupt and than comes into some money. The creditors are entitled to that money until and unless the bankruptcy is discharged. Thereafter they are out of luck.

So if this friend is still alive and can hold onto the £100,000 until after the mother is deceased then it should work fine in my view. But if this is via probate or some other legal process, then I would be wary about playing games with it even though LA investigation teams are, in my experience, usually fairly useless.

Dod101
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Re: What counts for care home Fees?

#351849

Postby Dod101 » October 29th, 2020, 10:20 pm

Thanks Lootman. Should have said that the friend died some months ago and the funds are left via her Will so it is going through probate or Confirmation as we know the process in Scotland. The beneficiary received a letter advising her that she is in the Will. The daughter received the letter as the POA holder for her mother whose mental capacity is not that good as I understand it.

Dod

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Re: What counts for care home Fees?

#351872

Postby CryptoPlankton » October 30th, 2020, 1:01 am

Dod101 wrote:Should have said that the friend died some months ago and the funds are left via her Will so it is going through probate or Confirmation as we know the process in Scotland. The beneficiary received a letter advising her that she is in the Will. The daughter received the letter as the POA holder for her mother whose mental capacity is not that good as I understand it.

Dod

I'm not familiar with the law in Scotland but, south of the border, I think the only possibility would be if the mother could convince a solicitor that she has sufficient mental capacity to make a Deed of Variation to divert her inheritance to her children. Trying to use the POA to transfer the money would be very dodgy as the golden rule is that any action taken by the attorney must be for the benefit of the donor. I think the DoV could be a legitimate way of preventing the LA from having a claim to the money, but IANAL. I'd suggest approaching a solicitor in the first instance.

Your interpretation of the intestacy rules certainly applies in England.

PinkDalek
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Re: What counts for care home Fees?

#351873

Postby PinkDalek » October 30th, 2020, 1:24 am

CryptoPlankton wrote:I think the DoV could be a legitimate way of preventing the LA from having a claim to the money, but IANAL. I'd suggest approaching a solicitor in the first instance. ...


DoVs are not said to be effective for these purposes.

Randomly found link https://www.barkerevanslaw.co.uk/2016/0 ... ter-death/ (albeit somewhat old). See the section headed Local Authority funded care.

Presumably the same applies in Scotland.

Edit: Similarly here https://www.thegazette.co.uk/all-notices/content/100941 which includes:

Bear in mind that if a will is varied with the intention of avoiding care home costs, the local authority can ignore the variation when making its assessment.

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Re: What counts for care home Fees?

#351874

Postby CryptoPlankton » October 30th, 2020, 2:23 am

PinkDalek wrote:
CryptoPlankton wrote:I think the DoV could be a legitimate way of preventing the LA from having a claim to the money, but IANAL. I'd suggest approaching a solicitor in the first instance. ...


DoVs are not said to be effective for these purposes.

Randomly found link https://www.barkerevanslaw.co.uk/2016/0 ... ter-death/ (albeit somewhat old). See the section headed Local Authority funded care.

Presumably the same applies in Scotland.

Edit: Similarly here https://www.thegazette.co.uk/all-notices/content/100941 which includes:

Bear in mind that if a will is varied with the intention of avoiding care home costs, the local authority can ignore the variation when making its assessment.

Bang goes that theory then! Sorry...

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Re: What counts for care home Fees?

#351891

Postby scrumpyjack » October 30th, 2020, 8:47 am

Although it can take quite a long time for the process of probate and estate administration to be completed and for the legacy to be received, I would have thought legally she became entitled to the £100,000 as from the date of death so the LA would probably assess her assets to include that amount as from the date of death. They would then be entitled to seek eventual repayment of care home fees as from that date.

hiriskpaul
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Re: What counts for care home Fees?

#353045

Postby hiriskpaul » November 3rd, 2020, 3:38 pm

scrumpyjack wrote:Although it can take quite a long time for the process of probate and estate administration to be completed and for the legacy to be received, I would have thought legally she became entitled to the £100,000 as from the date of death so the LA would probably assess her assets to include that amount as from the date of death. They would then be entitled to seek eventual repayment of care home fees as from that date.

I am not so sure about that as someone may choose to dispute the will for example. Until the will is proved, ie grant of probate obtained and creditors traced and paid I cannot see how any entitlement can be certain. The situation is even more uncertain if the mother is a residuary beneficiary. Until the estate has been wound up and estate accounts produced to the satisfaction of the residuary beneficiaries I cannot see any reason to inform the LA.

Difficult to see how this can be avoided though, unless the beneficiary dies before being paid.

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Re: What counts for care home Fees?

#353061

Postby Dod101 » November 3rd, 2020, 4:08 pm

As far as I know she is not a residuary beneficiary. She has been left £100,000 as a distinct amount in the Will. It seems outrageous though that the Local Authority could claim it since the beneficiary has no need for the money and it could go to a good home either with the daughter or grandchildren at no 'loss' to the beneficiary.

Dod

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Re: What counts for care home Fees?

#353071

Postby scrumpyjack » November 3rd, 2020, 4:20 pm

hiriskpaul wrote:
scrumpyjack wrote:Although it can take quite a long time for the process of probate and estate administration to be completed and for the legacy to be received, I would have thought legally she became entitled to the £100,000 as from the date of death so the LA would probably assess her assets to include that amount as from the date of death. They would then be entitled to seek eventual repayment of care home fees as from that date.

I am not so sure about that as someone may choose to dispute the will for example. Until the will is proved, ie grant of probate obtained and creditors traced and paid I cannot see how any entitlement can be certain. The situation is even more uncertain if the mother is a residuary beneficiary. Until the estate has been wound up and estate accounts produced to the satisfaction of the residuary beneficiaries I cannot see any reason to inform the LA.

Difficult to see how this can be avoided though, unless the beneficiary dies before being paid.


The LA would have to go on paying the fees until the legacy became available, but that is a simply a cash flow issue. It is their duty to enforce the law, which is I think that the state only bears the care home fees to the extent that the person has less than £23k. The unfortunate point here is that the generous deceased seems not to have appreciated these issues when she made her Will. Her solicitor should have advised her, but of course we don't know all the facts, I suppose.

The beneficiary would have to have died before her friend for the situation to be different. Simply dying before the executor paid the legacy would change nothing, unless the care home fees, from the friends death till the beneficiaries death, were less than £100k

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Re: What counts for care home Fees?

#353078

Postby Dod101 » November 3rd, 2020, 4:46 pm

So far as I know, the mother in the care home is a widow and the family never seem to have had a great deal of money and when she went in to the care home (having been living alone) with dementia or something like that, the LA paid the fees. This money has come out of the blue from an unmarried friend who no doubt thought she was being helpful and generous to her friend. I have no idea when the Will was made but presumably when the beneficiary was fit and well. Obviously the family would like the money to be set aside and in fact of course the LA knows nothing of it at the moment but the daughter is well aware of her responsibilities and does not want to get it wrong but at the same time feels (as I think I do) that it is wrong that the money should simply be swallowed up in fees so that the only beneficiary is in fact the LA. It is doubtful that the deceased had that in mind. I know that sometimes inmates paying their own way can get a better room.

Anyway, absent say persuading the executors to do a Deed of Variation, I cannot see that anything much else can be done but it does seem unfair.

Dod

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Re: What counts for care home Fees?

#353084

Postby Lootman » November 3rd, 2020, 4:53 pm

Dod101 wrote:Anyway, absent say persuading the executors to do a Deed of Variation, I cannot see that anything much else can be done but it does seem unfair.

PinkDalek suggested above that a DofV would not be effective to achieve that end. Not legally anyway.

I do wonder what would happen if nobody told the LA about it anyway. Would a LA scrutinise every probate to ensure that every recipient of such a means-tested benefit did not later get a windfall? Seems unlikely. Or would the LA rely on the will executor being impeccable and notifying the LA that it is an estate creditor? Based on my dealings with LAs they do not have the investigative resources that, say, HMRC has.

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Re: What counts for care home Fees?

#353097

Postby hiriskpaul » November 3rd, 2020, 5:25 pm

scrumpyjack wrote:
hiriskpaul wrote:
scrumpyjack wrote:Although it can take quite a long time for the process of probate and estate administration to be completed and for the legacy to be received, I would have thought legally she became entitled to the £100,000 as from the date of death so the LA would probably assess her assets to include that amount as from the date of death. They would then be entitled to seek eventual repayment of care home fees as from that date.

I am not so sure about that as someone may choose to dispute the will for example. Until the will is proved, ie grant of probate obtained and creditors traced and paid I cannot see how any entitlement can be certain. The situation is even more uncertain if the mother is a residuary beneficiary. Until the estate has been wound up and estate accounts produced to the satisfaction of the residuary beneficiaries I cannot see any reason to inform the LA.

Difficult to see how this can be avoided though, unless the beneficiary dies before being paid.


The LA would have to go on paying the fees until the legacy became available, but that is a simply a cash flow issue. It is their duty to enforce the law, which is I think that the state only bears the care home fees to the extent that the person has less than £23k. The unfortunate point here is that the generous deceased seems not to have appreciated these issues when she made her Will. Her solicitor should have advised her, but of course we don't know all the facts, I suppose.

The beneficiary would have to have died before her friend for the situation to be different. Simply dying before the executor paid the legacy would change nothing, unless the care home fees, from the friends death till the beneficiaries death, were less than £100k

I see what you mean. It is possible that legally the legacy became an asset of the beneficiary on the date of death, even if the precise amount of the legacy was not determined, or available, until near the end of the probate process. Just because the will says 100k, there can be no guarantee that the beneficiary will be paid 100k. In that case, then presumably the LA could ask for a refund of fees from the date of death. In which case it would probably make no difference whether the beneficiary was a legacy or residuary beneficiary.

Incredibly frustrating for all concerned.

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Re: What counts for care home Fees?

#353099

Postby hiriskpaul » November 3rd, 2020, 5:29 pm

Lootman wrote:
Dod101 wrote:Anyway, absent say persuading the executors to do a Deed of Variation, I cannot see that anything much else can be done but it does seem unfair.

PinkDalek suggested above that a DofV would not be effective to achieve that end. Not legally anyway.

I do wonder what would happen if nobody told the LA about it anyway. Would a LA scrutinise every probate to ensure that every recipient of such a means-tested benefit did not later get a windfall? Seems unlikely. Or would the LA rely on the will executor being impeccable and notifying the LA that it is an estate creditor? Based on my dealings with LAs they do not have the investigative resources that, say, HMRC has.

I think it unlikely that the LA would know about the legacy unless someone told them. They would have to rely on the honesty of the beneficiary's attorney, or beneficiary's executor if the beneficiary dies before obtaining the legacy.

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Re: What counts for care home Fees?

#353103

Postby scrumpyjack » November 3rd, 2020, 5:34 pm

The original post says that the daughter does not want to break the law, and if a solicitor is dealing with the estate and knows that the beneficiary is in a care home, he/she will certainly feel that the LA must be informed.

Knowingly concealing assets from the LA would be an offence.

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Re: What counts for care home Fees?

#353107

Postby Dod101 » November 3rd, 2020, 5:45 pm

scrumpyjack wrote:The original post says that the daughter does not want to break the law, and if a solicitor is dealing with the estate and knows that the beneficiary is in a care home, he/she will certainly feel that the LA must be informed.

Knowingly concealing assets from the LA would be an offence.


Yes That is the case as far as I understand it. I have suggested that they get some legal advice. It might be worth that. Of course, as has been said, the beneficiary may die before the funds are received or even at today's fees, before the £100,000 is exhausted, but it is clearly a most frustrating business.


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