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Can my mother avoid using her home to fund care costs?

My mother is 82 and her health is failing. I think she will end up in a residential care home. She is concerned all of her money will be spent on care. Her home is worth £400,000; she has £50,000 in a savings account. She has discussed transferring her house to my siblings and me. Can she do this and will it prevent her home being used for care costs?

Emily Robertson, a wills and probate specialist at solicitors Burgess Mee, says the need to provide care for relatives can create some hard decisions for families. Clients often want to pass their entire estate to their children rather than be spent on care costs and depleted by inheritance tax.

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Emily Robertson, a wills and probate specialist at Burgess Mee

When an individual needs access to care, their assets are means tested. This includes an assessment of both income and capital. A decision is made as to whether care should be funded by the individual, the state or a combination of the two.

Currently, the upper limit in England for a contribution from the state is £23,250. The lower limit where care is paid for by the state is £14,250, though where care is provided at home the local authority has some discretion. These caps are set to rise significantly from October 2023. Given the cost of residential care, even the higher limit may not cover the cost in full.

From her assets, your mother will probably be self-funding her care. You may wish to consider whether residential or at-home care is more appropriate. Her liquid assets would be used initially, but it may then become necessary to sell her home to fund any balance. Therefore, I understand why she would want to pass her home to you and your siblings.

Regrettably, she may fall foul of the intentional deprivation of assets (IDA) regime. The care and support statutory guidance states that IDA occurs where an individual has intentionally deprived or reduced their overall assets in order to cut the amount they are paying for their care.

An individual needs to be aware that they are going to require care and support and have transferred assets out of their estate to reduce their contribution to care. A local authority would investigate this. If they find that deliberate deprivation has occurred, they could include the asset in the means test or try to recover care costs from the person who now owns the asset.

As your mother is aware she may need residential care and would like to transfer the property to reduce her contribution to care costs, she is likely to be caught by the IDA regime.

Bullying row — can a school charge us for term’s fees?

Our daughter was so badly bullied at her London day school that she left. The repercussions for her have been huge in that she had to repeat a year’s schooling and has been diagnosed with PTSD. Despite clear failings in terms of the school’s pastoral care, the school is pursuing us for a term’s fees because we did not give the required notice. What can we do?

Dan Dodman, a partner in the dispute resolution team at law firm RWK Goodman, says you are not alone in this issue. I have seen a number of cases where children of clients have been seriously let down by their schools.

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Dan Dodman, a partner at RWK Goodman © SNAP

This kind of scenario is obviously incredibly emotive and difficult — it can cause serious problems at home and the element of unfairness is very painful. The steps that I have suggested below are all ones that can be carried out by yourself but it can be helpful to have professional advice from a solicitor, partly to deal with the emotional toll that this kind of dispute can take.

There are two separate issues taking place here although they are clearly related. First, the non-payment of fees and second, the treatment of your daughter.

In terms of the first fee issue, it is important to review the terms and conditions of schooling carefully. Slightly counter-intuitively, a school’s contract with parents is similar to almost every other contract we enter into on a daily basis. You should have been provided with a copy when your daughter joined the school — if not, ask for it.

It is common for independent schools to require a term’s notice for the withdrawal of children and, on that basis, I suspect that the school has a good claim against you in terms of the unpaid fees.

However, it also seems that they may have breached their contractual duty to your daughter in respect of her schooling. Review the contract: there is likely to be a provision dealing with the contractual standards of care that the school should be providing to your daughter. All schools should also have pastoral and/or anti-bullying policies. You should review these and ask:

  1. What steps could the school have taken to identify the issues earlier?

  2. Has the school followed the policies and procedures that it sets out in its policies?

  3. Have you been kept fully up to date with the actions of the school?

  4. What additional steps might have been taken to ensure that your daughter was properly looked after?

Having done this, you should review the school’s complaint process and use that procedure. If the school is actively chasing you for fees, you should raise the issues you have identified with them and say that you would like the complaints procedure to be completed before you pay any more.

Particularly aggressive schools may seek to instruct debt collection agencies to recover funds. If this is the case, I would recommend contacting a solicitor immediately to raise the fact that this is not a simple case of unpaid debt but one where fees are unpaid because the school has failed in its duty of care.

Unfortunately, these matters are extremely difficult to deal with but the key is to hold your ground, remain calm and set out the facts simply and clearly.

The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.

Our next question

British by birth, I moved to the US 25 years ago for work reasons and now plan to move back with my family — my American wife and our two children. I understand there are special tax rules for returning domiciled people. What do I need to be aware of and should I transfer any assets into my wife’s name to mitigate the position?

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