A common situation is this: mother is suffering from advanced dementia and father, though mentally fine and alert has difficulty walking, so son and daughter arrange for mother to be looked after in a care home and father to move to stay with daughter.
It has been the family home since mother and father bought it jointly when they got married 40 years ago and is now worth £200,000.
Because they need to access mother’s personal funds, and in the absence of a Power of Attorney, an application to the Court of Protection has had to be made to appoint daughter as a Deputy.
Luckily at this point son and daughter sought legal advice, in the first place to deal with the sale of the house. The first thing they were told was a sale was not compulsory. The solicitor arranged to visit daughter’s home to see her father and advised him that if their ownership of the house were slightly altered, father could then make a will leaving his share to the trustees of his will for the benefit of his children. This would protect one half of the value of the house completely.
Unfortunately the solicitor said he could not protect the half share owned by mother. But, he said, because of the special way that that half share would be valued for the purpose of calculating “capital available to mother” and deducting other acceptable reliefs available, the resultant capital which would in fact be available could be up to half it’s real value; the Council would have to wait for their money until after mother’s death, but would have a mortgage on the house until then.
The Court of Protection would not have to be consulted about the arrangements since no sale of the house was needed.
But there was one very important warning about this whole scheme: the house must not be sold until after mother’s death.
There would of course be nothing to prevent father agreeing to let the property and half of the rent could be made available for his wife’s care if he wished.
So by seeking early advice on this matter, at least three quarters of the value of the family home had been saved for the children’s benefit later.