Daily Mail printed the following article on Saturday morning.. Councils are spying on parents who sign over their homes to their children to avoid care home fees. Local authority inspectors are rifling through residents’ financial records to see if they deliberately tried to conceal their property wealth.
If they uncover evidence that parents gave their home away as a ploy to escape care bills, they can use little-known powers to force the family to sell the property and pay up. One council, Buckinghamshire, confirmed its inspectors were making such investigations. Leading charity Age UK is so concerned at the number of families trying to avoid care fees it has published guidelines warning of the pitfalls in signing over property. It warns that families may be embarking on a risky act, saying that budget-conscious councils are ‘likely to look at cases’ where they think ‘deprivation of assets may have taken place’.
Last night campaigners for the elderly said the ‘grey area’ of the law meant many families could be vulnerable to losing homes already signed over. The warning has been issued because increasing numbers of parents in their 60s and 70s are handing the deeds to their home to their children to stop it being included for means-testing. This allows them to live in their home but no longer be its legal owners.
Many solicitors offer to help, at a cost of several hundred pounds, and claim on their websites that this tactic is a way to avoid such care bills. Councils now employee avoidance inspectors to probe a family’s financial affairs if they suspect they deliberately tried to shelter their home from them. To hunt for evidence, officers can demand to see notes from meetings with financial advisers as well as any legal documents signed with solicitors.
If they decide they have enough proof that a family set out to deliberately hide the property from the council, they can reverse the transfer of ownership. This means the home is switched back to the parents – and will be included in the test for funding. If a parent does it shortly before going into care – despite being in good health – they are more likely to be investigated. Anyone who passes over the deeds but then has to go into care within six months will almost certainly be liable for care home bills.
But if the switch is made two or more years before the parent goes in to care, council officials are less likely to pry. However, if they have reason to believe it was done deliberately, there is no limit to how long they can go back. The council can’t force the sale of the house, but it can demand the money be paid from somewhere, leaving those who have moved into the house either having to foot the bill out of their own savings or apply for a deferment – but then having to sell the house when their relative dies. Alternatively, they may have to sell up immediately and use the cash for the care bill. ‘Anyone who tries to shield their home from local authorities is stepping into a minefield,’ said Janet Davies, of Symponia, a professional body for care home fee advisers.
‘Most people who try to do it don’t realise what they are getting themselves into. By doing what they think is best for themselves and their children; they can end up in the worst possible position. ’Stephen Lowe, a spokesman for Age UK, said: ‘We’re seeing a lot of families concerned about trying to protect their homes from inclusion for care home fees. ‘The problem is that it’s such a grey legal area for people to get involved in – and that it’s down to councils to work out what they think was deliberate deprivation.’ Many families try to defend their actions as a legitimate effort to avoid inheritance tax.
However, unless a family has assets of more than £650,000 (the inheritance tax threshold for a couple), the argument usually won’t wash. The spiraling cost of long-term care fees has triggered fears that it will destroy the wealth families have built up over decades. Weekly bills for a room in a care home average £532, or £750 for nursing as well. With the average length of stay at 66 weeks, the bill can be anything up to £50,000.
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