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Clare, Solicitor
Category: Law
Satisfied Customers: 35087
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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One of my parents, my mother, will shortly enter a nursing

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One of my parents, my mother, will shortly enter a nursing home. Excluding their home they have no significant investments and as such social services will pay a significant part of the cost but this will still leave a top up from the family of £20K per annum.

Currently we are proposing that the children will pay this top up and effectively loan my father this amount on an annual on-going basis which will ultimately be reclaimed from the estate.

However we wish to protect ourselves and ensure that such a loan is recognised and repaid under the following circumstances:
(a) My father have to enter a nursing home and thus ‘forced’ to sell his home and social services using the residual to pay for his care or
(b) On my father’s death and subsequent distribution of the estate.

We would like to achieve this objective with a minimum of fuss and formality and are proposing a written loan agreement which was signed by the relevant family members.

Under circumstances (a) and (b) would this be sufficient to allow the loan to be recognised and allow it to be re-paid prior to any other financial distributions ? If not could you please suggest an alternative approach.

At some point in the future my father may require to enter a nursing home at which point he will be required to sell his home. Under current circumstances he will then have to pay for the full cost of his care which will relatively quickly consume his estate. I am considering at this time that the capital or part of the capital is used to purchase a 'care fees annuity' immediately prior to entering the home. It is intended that once his remaining estates drops below £26K social services will start contributing to his basic care costs whilst the 'care fees annuity' will provide a 'top up' so that he can enjoy more comfortable surroundings. Is such an approach viable or would it be seen as an attempt to avoiding paying nursing fees ? Are there any other viable techniques to address 'top up' fees ?

Thank you
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
How much is the property actually worth?
Customer: replied 4 years ago.

Property is circa £250K hence there is no particular concern is respect of inheritance tax.



Does your mother still have mental capacity? (sorry to be blunt)
Customer: replied 4 years ago.

I have provided some additional information to try and anticipate your questions:

(a) Mothers Mental capacity - No. I have with my sister Power of Attorney

(b) Deeds of house are in joint names (mother and father)

(c) Wills are currently back to back; i.e. mother leaves everything to father and on his death leaves everything to children and vice versa.

(d) I am considering asking my father to modify his will to split his estate amongst the children and effectively bypass my mother to try and protect at least a portion of the house.


Thank you for that
You should certainly action the last point as soon as possible so the the property is held as Tenants in Common and his share does NOT pass to your mother in the event that he predeceases her
Certainly a loam agreement can be drawn up and will be effective if your mother passes first in protecting some of your father's estate
It will form a debt which along with any other debts will have to be settled prior to distribution
I am afraid that a Care Home Annuity cannot be simply used for the top up fees - if they do not cover all the fees then the Local Authority will simply assume that the full amount of the capital is still available to your father
Please ask if you need further assistance
Clare and other Law Specialists are ready to help you
Customer: replied 4 years ago.

Thank you - excellent service

You are most welcome - I hope all goes well