Is gifting to your kids before going into care considered hiding assets?

Published by Helen Morrissey on 07 September 2018.
Last updated on 07 September 2018

Q

My mother recently suffered a stroke. She was a carer for my dad, who has a brain disease. As a result, they have now both been taken into care. As social services will probably take their estate to pay for care, they want to gift us some money while they can. They’ve never gifted us anything before.

If they gift us several thousand each, would it be classed as trying to hide money from social services? My parents are distraught that the house they thought would be our inheritance is now gone and would like to give us a little before it’s too late.

From:
AK/Holbeach

A

It is completely understandable that your parents want to get their finances in order now they have been taken into care. But they will need to be careful not to fall foul of council rules on deprivation of assets. This is when someone deliberately reduces their assets (such as money or property) so they are not included when being assessed for care home fees.

If your parents are deemed to have done this, then they could be means tested as though they still owned these assets, which could cause them more stress at an already difficult time.

When deciding whether someone has deliberately reduced their assets in this way, the council will consider the following.

“When deciding how much to give away, your parents must look at their own care needs”

You must have known when you gave the assets away that you would or might need care.

Avoiding paying for care must have been a significant reason behind giving away the assets.

While small gifts are unlikely to cause much alarm, handing over a large amount of money, particularly if they have never done it before, could mean that your parents’ decision to gift money to you is challenged by the council.

When deciding how much money they would like to give to you, your parents must take their care needs into account and ensure they do not give away too much and put themselves in a position where they may struggle to meet their bills.

This article was written in response to a reader’s question. If you have a financial or work/career question that has left you scratching your head ask our panel of experts who will aim to shine some light on the matter.

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