How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Clare Your Own Question
Clare, Solicitor
Category: Law
Satisfied Customers: 35042
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
Type Your Law Question Here...
Clare is online now

My 89 year old Mother took out an Equity Release plan a few

This answer was rated:

My 89 year old Mother took out an Equity Release plan a few years ago. She has now gone into Residential Care, and the local authority are asking me (I have power of attorney) to fill in a form in order that her financial contribution can be assessed. They are asking if there is such a plan, and details of it. Are they entitled to have the details about this? Are they likely to ask her to pay any of the money back (not that she can) if she can't prove what she spent it on?
HiThank you for you questionMy name is ***** ***** I will do my best to assist youHow much was involved and to the best of your knowledge how was it spent?Clare
Customer: replied 2 years ago.
She took out just under half the equity; this being around £60k. She had a new kitchen fitted, a new boiler, new carpets throughout, windows painted and general work to the property, plus she gave me and my brother £5k each.
How long ago were the gifts made?
Customer: replied 2 years ago.
just over 4 years ago
How much is the current equity?
Customer: replied 2 years ago.
I'm not sure, but I would imagine it's touch and go as to whether she would fall below the threshold of £23,500?
At the time of the equity release was it considered likely that you mother might need to go into a nursing home in the future?
Customer: replied 2 years ago.
No, not at all. She was fit and well and wished to remain independent; albeit in the early stages of dementia (tho with a care package in place). The offer for her to come and live with me was always on the table (for the last 20 years or so after my father died) but she remained indignant. The nursing home thing only came about after a neighbour discovered she'd had a small stroke, and after a spell in hospital they put her into respite care. I had issues with her care package anyway, but after a while when the social worker came to assess her in the home, they decided that she was not going to be able to return home alone with me being so far away (in Lincolnshire), being relyant on neighbours, and after I made a formal complaint about the care she was (not) receiving at home. Also her dementia had got worse.
Sorry - d o you mean the dementia had already been diagnosed when this took place?
Customer: replied 2 years ago.
Yes, she was in the early stages, but with support and a care package in place at home, she was doing fine. I should also say that when she went into hospital, they sent her into respite care for a couple of weeks as clearly she had been going down hill one way and another. After the 2 weeks, a social worker came to assess her in the home and it was then decided she needed 24 hour care and would not be allowed home. After a while, my Mum was getting restless and kept asking/demanding she be allowed home. Clearly this was a problem as I'd been advised to put her house on the market in order to pay for fees, so I requested an official assessment under the Deprivation of Liberties Act. They have never had the courtesy to get back to me and let me know the outcome, but I presume the decision remains the same. By the way, the Equity Release plan was her idea, and with only a little assistance from me, she dealt with it herself.
HiI am afraid that they are entitled to details of the plan - and how the money was spent.The only expenditure that is at risk is the gifts made to you and your brother.The fact that the dementia had already been diagnosed at that time means that the LA are going to treat this as "deprivation of assets" and will assess her onthe basis that those funds were still available to her.It would be very hard, if not impossible to oppose thatI hope that this is of assistance - please ask if you need further detailsClare
Customer: replied 2 years ago.
Does this mean, for instance, if the property is sold for £130k and there is only £23,500 left that she (or someone) will have to continue to pay fees for her? How can we do that if we do not have any money? And up to what amount? How much will the LA delve into what she has spent the money on, as I doubt whether there will be many/any receipts around to prove what she's spent it on?
How much is left in the house?
Customer: replied 2 years ago.
At this point, I can only gestimate as I am unable to get in touch with the provider. Because the interest rolls up, there will be about £35k worth of equity left. I have looked at the plan and also, I can not see anywhere where it outlines what the money was intended for!?
Customer: replied 2 years ago.
You say the only money that's at risk are the gifts to me and my brother, yet on the next line you say they would assess her as if funds were still available. Do you mean ALL the funds, or just the bits we had? Will I have to try and find receipts for what she spent the rest on?
My apologies for not being clear - it is the £10,000 that the LA would treat as still being available.
provided you can show evidence that work was done - bank statements showing payments to workmen etc then it is only the £10,000 that will be a problem.
Given that between £16,000 and £23,000 there is a sliding scale of contributions this simply means that your mother will not be entitled to assistance until her savings are £13,000 and will not receive full cover until they are £6,000
Clare and 3 other Law Specialists are ready to help you