Home > Financial Planning > Giving Away Assets to Avoid Paying for Care

Giving Away Assets to Avoid Paying for Care

By: Sarah O'Hara BA (hons) - Updated: 12 Mar 2018 | comments*Discuss
 
Giving Away Assets Deprivation Notional

The decision on whether you should pay for your own care home fees, and how much you should pay, is based on your assets and capital, such as your home, your savings and your investments. More information on this is available in our article Your Contribution to Care Home fees.

In short if you have assets over the value of £23,250 you’ll be expected to pay for your own care. If you have assets worth over £14,250 but less than £23,250 you’ll be expected to pay for part of your care.

So, in order to avoid this payment, or in a bid to pay less, it may be tempting to simply give away money or property to close friends or family, as a gift or early inheritance. Unfortunately it isn’t that simple.

Deprivation of Assets

If you deliberately give away or convert assets to put yourself in a better position to receive financial help from the Local Authority for your care, this is known as deprivation. This includes both giving away assets and deliberately spending large amounts of money immediately prior to the assessment. Deprivation can also include selling off an asset for much less than it is worth.

The Local Authority must prove that any deprivation is deliberate. If you gave away money or went on an extravagant holiday a while ago, before a care home was imminently on the cards, you won’t need to worry.

The council may try to recover any assets they claim you have deliberately deprived either from you, or from the person you gave them to.

Notional Capital

If you are found to have deliberately given away assets or similar, you could well still have to pay towards your care, and this could leave you in a difficult situation. The council may ask you to pay what is known as ‘notional capital’. You will be assessed as having the same amount of notional capital as you have given away, which could be equivalent to the full cost of your care.

Disputing a Deprivation of Assets Decision

If your Local Authority believes you have deliberately deprived yourself of assets to avoid paying for care, but you disagree, you can appeal.

In the first instance you should discuss your case with the Local Authority to see if things can be resolved. If not, the next step is to submit a formal complaint in writing. The Local Authority is obligated to respond within 28 days. If you still disagree with the decision, the matter goes to a review panel. There are three panel members and at least one member must be independent of the Local Authority.

Other Considerations When Giving Away Assets

As well as the legal and financial implications, such as those above, of giving away assets, there are other important issues to consider. This applies even if you are considering giving away assets for a reason other than to avoid paying care costs.

If you pass your home on you may not be able to sell it on later. The person you give any assets to might not agree to sell it when you want to.

If you are thinking about giving away assets for any reason you should always seek professional financial advice beforehand

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
[Add a Comment]
John - Your Question:
My mother gave her home over to myself 11 years ago through a solictor. My sole name has since this time been on the deed which I keep in my possession. Sadly in the last 3 years my mother has been diagnosed with dementia. She very recently went into a care home, currently social care is paying for her fees. She is yet to be financially assessed. Will my house be liable to be sold etc?

Our Response:
Since it was 11 years ago (assuming your mother showed no signs of ill health at the time), it's less likely that the council will investigate (as they would if it were 12 months for example) but there is actually no time limit on how far they can go back.
FundingCaring - 14-Mar-18 @ 3:08 PM
My mother gave her home over to myself 11 years ago through a solictor. My sole name has since this time been on the deed which I keep in my possession. Sadly in the last 3 years my mother has been diagnosed with dementia. She very recently went into a care home, currently social care is paying for her fees. She is yet to be financially assessed. Will my house be liable to be sold etc?
John - 12-Mar-18 @ 3:48 PM
My nan has just been refused help from financial assesment and got 1week left as my dad as been given 28days notice for £29000.00 I dont know what is going to happen.I have contacted local mp and feel I want to shout load about this ,not one member of our family have been offered help or support and social services just dont care because she is self funded,but had attendance allowance stopped last april when we first applied for financial assesment. Can anyone help
lw - 5-Mar-18 @ 11:32 PM
Jill the pill - Your Question:
My mum went into catr 4 months ago and is self funding. Her house is being sold to self fund her a further 3 years. Is she allowed to give her annual £3,000.00 a year to help her family ?

Our Response:
We don't know whether there is a limit to this if you are self funding.Usually the council will have to prove that you have deliberately given away assets to avoid paying for care. If you give grand children presents for a wedding or to help with university costs etc we're not sure whether/how much this is accepted, sorry.
FundingCaring - 5-Dec-17 @ 1:57 PM
My mum went into catr 4 months ago and is self funding. Her house is being sold to self fund her a further 3 years. Is she allowed to give her annual £3,000.00 a year to help her family ?
Jill the pill - 4-Dec-17 @ 7:40 AM
Di - Your Question:
My Mum had to come and live with me so I could care for her. She sold her house and agreed to pay me £1000 monthly which covered the wages I had to give up. I still have a large mortgage. She sold her house. My brother wanted half the house money to buy his council house, which Mum agreed to. The rest of the money is coming to an end now, can she claim for help at all?

Our Response:
We don't have enough information about your circumstances to really be able to help with this. You could try the Turn 2 Us calculator or Citizens' Advice for more information.
FundingCaring - 17-Aug-17 @ 1:43 PM
My Mum had to come and live with me so I could care for her. She sold her house and agreed to pay me £1000 monthly which covered the wages I had to give up. I still have a large mortgage. She sold her house. My brother wanted half the house money to buy his council house, which Mum agreed to. The rest of the money is coming to an end now, can she claim for help at all?
Di - 16-Aug-17 @ 2:09 PM
My perants want to gift me there property as my dad is terminally ill. My mum is in early stages of dementia.How does the 7 year rule on gifting work if my mum ends up in a home but for example lives for another 10 years can the property be made to sell to pay care home fees
Chopper - 28-Jul-17 @ 10:11 PM
I would ike to sell my. House and buy one with an annex with my daughter and husband living upstairs inn the house rent freeon my death I would like other my Son and daughter equal amount of my assists would my daughter be able to claim my house or would it have be sold as stated in the wil
JayneJ - 5-Jun-17 @ 11:47 PM
Hello I put a Q to yourself back in April & it has not be3n answer mum left house for my 2 members of family only there nam3 on titled deeds nothing in will about house another member of family is contesting to the names people on titled deeds can h3 do that as it's 2yrs now there names have been on deeds of house
Smudge - 21-May-17 @ 11:56 PM
Hi my mum was in the radar of dementia 2014 but was not diagnosed as she still lived indepently cooking feeding herself she signed her title deeds over to 2 members of the family 2015.mum was aware of what she was doing so was her lawyer as she went into his office herself because mum had dementia slightly how does it go with her signing titled deeds as she didn't get her diagnose until August 2016.
Twinkle - 30-Apr-17 @ 10:21 PM
John - Your Question:
My aunt gave away 13000 in gifts can they make people got them pay them back

Our Response:
No.
FundingCaring - 16-Feb-17 @ 11:19 AM
My aunt gave away 13000 in gifts can they make people got them pay them back
John - 15-Feb-17 @ 11:56 AM
My mother and father signed there home over to me and my sister in 2000. My father died in 2002 There is a clause in the will that says my mother can live in the home till the day she dies. Is there any way she can change the deeds as it was her and dad who did the will and she is still alive. There has been a breakdown in the family and she now wants to change it if possible.
Abracadabra - 24-Jan-17 @ 12:36 PM
My mum in s care homereceived a payment of back pay of 12000 and she gave 4500 to me to help me pay off a debt and 3000 to her sonto help with moving into his new home .she had 13000 in total .she was due to get inheritence from family member .we phoned about what she could do with her money as inheritance was dueand was adviced it was her personnal savings so she could use how she wished .then she recieved her inheritence whuch turned out to be 40000 then during that time she has paid for her son to have carpets and has lent me a futher 2000 and spent roughly 500 on her self every month aswell as paying full care costs .do we have to pay back what she has given to us
Leigh - 24-Jan-17 @ 5:40 AM
My mother has been living with my brother for over two years in a purposely built annexe. She has just sold her bungalow for over £210,000. She wants to share this cash with my brotherand myself while we still have time to enjoy it ourselves. She is being cared for, is a little frail but in good fettle for 92years. How does she stand concerning this distribution.
Higgo - 14-Oct-16 @ 5:15 PM
Solly - Your Question:
My dear friend who owns her house in her sole name, which has been the case for over 12 years and also solely owned her previous house due to her husband's bankruptcy, has been advised that this would be deprivation of assets and she needs to pay for her husband's care as he is in the late stages of alzheimers. She gave up work two years ago to be his main carer but now he is too difficult to care for at home and he needs to go into a care home. He has no bank account, no savings and his name never been on the deeds of my friend's property. She has been told she will have to pay if she moves from her present home. Unfortunately she would have to move, as she would not be able to afford to stay there as there is still a small mortgage and she would have to downsize. She is in a terrible state as she has been advised that she would have to contribute. She has no money at all apart from carers allowance as her husband is 18 years older than she is and she is almost 60. Is the advice she received correct??

Our Response:
No we think this is incorrect. Statutory guidance says that your local authority cannot include capital or income belonging to a partner in your financial assessment. This is because it does not have the power to assess couples or civil partners according to their joint resources - each person must be treated individually. Local authorities should therefore not generally use joint assessment forms that ask for details of both partners’ finances. However, a local authority may ask for details of your friend's finances on a separate form to ensure she will be left with sufficient resources to live on when her husband goes into a care home.
FundingCaring - 8-Sep-16 @ 2:16 PM
My dear friend who owns her house in her sole name, which has been the case for over 12 years and also solely owned her previous house due to her husband's bankruptcy, has been advised that this would be deprivation of assets and she needs to pay for her husband's care as he is in the late stages of alzheimers.She gave up work two years ago to be his main carer but now he is too difficult to care for at home and he needs to go into a care home.He has no bank account, no savings and his name never been on the deeds of my friend's property.She has been told she will have to pay if she moves from her present home.Unfortunately she would have to move, as she would not be able to afford to stay there as there is still a small mortgage and she would have to downsize.She is in a terrible state as she has been advised that she would have to contribute.She has no money at all apart from carers allowance as her husband is 18 years older than she is and she is almost 60.Is the advice she received correct??
Solly - 7-Sep-16 @ 4:54 PM
My mother and father signed their house over to both my sisters making all four of them owners on the deeds of the house. I am not included and my mother had claimed for four years since my father died, that she has left her house to all 3 of her children !! there is this written there also, what does it mean. RESTRICTION: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.
Rosie - 29-Jul-16 @ 9:23 AM
My 90 year old mother pays the full cost of her care workers who visit her in her rented home. She has approximately £35k savings left. She has not given money to her 6 children before, even as birthday presents, believing that they would inherit her savings. She would now like to do so as some are providing care and incurring expenses. Two daughters are also in financial difficulty. Would she be able to give £3000 away without this being seen as deprevation of capital?
Gin - 24-Jul-16 @ 8:05 AM
Winnie - Your Question:
My mum sold her house and has been self funding her own care for two years. She had some bills I had to pay and she also owed me some money from the cost of moving out all of her stuff plus dealing with the house sale. She has given me a bit of money here and there and also she has bought the kids gifts etc. Her money is now reaching the funding sealing. Would these small amounts be seen as getting rid of her assets. We are talking fairly small amounts adding up to no more than about £2000 over two years.

Our Response:
Small sums like this would probably not be seen as deliberate deprivation of assets. The rules state that " You are not allowed to purposely offload assets in order to reduce your capital and property so that they fall below the level at which the local authority must contribute to the cost ofyour care."There no real figures to demonstrate fixed allowances/sums that you can give away without at least being investigated. AGE UK has produced this useful guide which should help.
FundingCaring - 7-Jul-16 @ 12:02 PM
My mum sold her house and has been self funding her own care for two years.She had some bills I had to pay and she also owed me some money from the cost of moving out all of her stuff plus dealing with the house sale.She has given me a bit of money here and there and also she has bought the kids gifts etc.Her money is now reaching the funding sealing.Would these small amounts be seen as getting rid of her assets.We are talking fairly small amounts adding up to no more than about £2000 over two years.
Winnie - 3-Jul-16 @ 10:31 PM
Mum lives in w controlled h a flat paying full rent. No housing benefit.Nowin hos assessed as needing carers to go in on dischzrge 4 x daily. She has 25ksavings told shes to pay care bills in full no local authority financial assistance . Rent plus bills plus cleaner plus this ccare will be as expensive as residentialbut without benefits of 24hour care.Thoughts please?
netty - 27-May-16 @ 12:06 AM
My wife has financial position for her 89 year old mother who has vascular dementia and Alzheimer's.My wife is her carer and although currently in her own home will soon not be able to cope.We wish to move to a house where we could accomodate her as we do not want her in a home.However we would need to use some of her savings to do this whilst renting out her home.How can we legally do this?
Biscuit - 10-May-16 @ 5:26 PM
My mum has been in a home self funding and has sold her house for 50,000 the money will last for four years to pay for her care fees ! Will I be able to gift some to family if this money will last 4 years
Claret - 28-Jan-16 @ 6:32 PM
My mother in law went into a nursing home three months ago on a permanent basis and is self funding for fees purposes. She declined a financial assessment by the local authority as she accepts thather assets exceed the limit. She has savings of various sorts and a house which is now empty and which she wants to be sold, following which she wants to give the proceeds to her four children. Can she do this and what are the implications in the future? She would also like to give financial gifts to other family members from her savings/assets.
Rickc - 31-Dec-15 @ 12:44 PM
Deme - Your Question:
My mum went into a care home 2 years ago. Her house was sold for £54 000. She has been classed as self funding and there is now only £30 000 left. Is she entitled to give money gifts to her grandchildren from this or will it be classed as deprivation of assets. One grandchild is shortly to get married and she wishes to give money as a wedding presentI should be grateful for any advice n the matter

Our Response:
The local authority will look at the intentions behind the gift. If it's deemed the gifts are not intended as a means to dispose of assets (and avoid care charge) then they will be deemed acceptable. They may become suspcious if an excessive amount is given.
FundingCaring - 30-Sep-15 @ 2:04 PM
Deme - Your Question:
My mum went into a care home 2 years ago. Her house was sold for £54 000. She has been classed as self funding and there is now only £30 000 left. Is she entitled to give money gifts to her grandchildren from this or will it be classed as deprivation of assets. One grandchild is shortly to get married and she wishes to give money as a wedding presentI should be grateful for any advice n the matter

Our Response:
The local authority will look at the intentions behind the gifts. If it's deemed the gifts are not intended as a means to dispose of assets (and avoid care charge) then they will be deemed acceptable. They may become suspcious if an excessive amount is given.
FundingCaring - 30-Sep-15 @ 1:00 PM
My mum went into a care home 2 years ago. Her house was sold for £54 000. She has been classed as self funding and there is now only £30 000 left. Is she entitled to give money gifts to her grandchildren from this or will it be classed as deprivation of assets. One grandchild is shortly to get married and she wishes to give money as a wedding present I should be grateful for any advice n the matter
Deme - 29-Sep-15 @ 6:18 PM
My M-I-L has Vascular Dementia and went into a self funded £750 p/w residential setting earlier this year. Her house is currently empty and in theory she has enough to last her 3-4 years financially without selling the house. Her eldest son is her EPA. Her younger son and I would like to purchase her house so that it remains within the family and we will be closer to her during her final stages as we currently live nearly 5 hours from her. My question is: 1. Is it possible for us to live in the house without having a negative affect on her financially before/after her death? Many thanks in advance
flutter5514 - 4-Sep-15 @ 7:05 PM
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Further Reading...
Our Most Popular...
Add to my Yahoo!
Add to Google
Stumble this
Add to Twitter
Add To Facebook
RSS feed
You should seek independent professional advice before acting upon any information on the FundingCaring website. Please read our Disclaimer.