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james bruce
james bruce, Solicitor-Advocate
Category: Law
Satisfied Customers: 5158
Experience:  Owner at James Bruce Solicitors
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Need advise brother has gone into care he gifted his money

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need advise brother has gone into care he gifted his money to me two years ago and the local authority now want the money back, which is spent. I didnt envisage that he would have to go into care.
JA: Where are you? It matters because laws vary by location.
Customer: biggin hill kent
JA: What steps have you taken so far?
Customer: none
JA: Anything else you want the Lawyer to know before I connect you?
Customer: no

Hello I will assist you today.

sorry to hear about your brother and that local authority are troubling you.

Unfortunately, there are grounds for the local authority to seek the money back from you.

If your brothers health at the time or age at the time could possible lead to him needed care home care in the future, then it is possible that an argument could be made that there was a deliberate deprivation of money. I have explained more below.

The care-fees avoidance ruse

This is an area fraught with difficulty. Briefly, you risk falling foul of the ‘deliberate deprivation of assets’ rules, because even discussing with an adviser the idea of giving away money means that you are demonstrating deliberate intention. If you are found to have deliberately given away assets, they are treated as if you still owned them in any means test for receiving local-authority assistance with care fees.

In some cases the local authority can ask for money to be repaid or, if property has been purchased with the money, a charge can be placed on it to recover the cash when the property is sold.

The first question you need to ask yourself is: do you really want to throw yourself on the mercy of the local-authority budget when you might have been able to afford something better if you only had the cash?

The rules around paying for care.

Deliberate deprivation

Whether you have ‘deliberately deprived’ yourself of your own money comes down to motivation. If you have given away money at an early age, when you are in good health with no prospect of needing care, your motivation would normally not be regarded as ‘deliberate’.

However, the matter is one of interpretation, and there is no ‘safe cut-off point’, as there is with the seven-year rule for inheritance tax, and the local authority can look back as far as it likes.

The same applies to other means-tested benefits if you have exhausted your pension by spending the money or giving it away. People often do not realise that deliberately exhausting their pension savings could mean they lose any entitlement to means-tested benefits, potentially leaving some to survive on a reduced state pension.

The Department of Work and Pensions explained the rules last year: "If you spend, transfer or give away any money that you take from your pension pot, DWP will consider whether you have deliberately deprived yourself of that money in order to secure (or increase) your entitlement to means-tested benefits. If it is decided that you have deliberately deprived yourself, you will be treated as still having that money and it will be taken into account as income or capital when your benefit entitlement is worked out."

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