Annie answers a reader's question about giving money to her daughter. This is an area fraught with difficulty. So is there a way of avoiding care home … We find that many of the consequences can be over-looked. The Law Society gives detailed guidance to solicitors on the comprehensive advice clients must receive in connection with gifts of this nature, dealing with all the consequences risks and benefits. You can’t take it with you but giving money away can be fraught with problems. If you are a taxpayer, you should endeavour to make charitable donations under the Gift Aid regime. This is one of the most common reasons that people consider gifting property; as if you have over £23,250 then you will be required to pay your own fees in full (known as being self funding). Annie Shaw is a freelance money contributor and frequent broadcaster on radio and TV. Use Retirement Funds. Alex Edmans, head of retirement at Saga Personal Finance, says: "Inheritance can be an emotive issue. Your home may be repossessed if you do not keep up repayments on your mortgage. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. Hampshire-based solicitors Donnelly & Elliott warn: "A gift of money leaves you with no control of it, which can be disconcerting if, for example, the son or daughter is buying the property with a friend or partner, or if they’ve shown signs of not being able to deal with their finances in the past. My mum is mostly self funding in her care home for 7 years . My mum is mostly self funding in her care home for 7 years . Published: 02:47 EST, 17 June 2019 | … The same applies to other means-tested benefits if you have exhausted your pension by spending the money or giving it away. At the point the capital was disposed of could the person have a reasonable expectation of the need for care and support? Find out more about tax and gifting money to children. Now if the child purchases a property with the cash, marries and subsequently divorces, the value of the property is likely to be included in any divorce settlement, meaning that a good proportion of the cash you have bestowed on your child is lost to the estranged partner. Question about your subscription? Parents should realistically consider how best to use the money they have to make sure they have enough to fulfil their retirement goals and have something left for later-life care, as well as what to leave for their children.". 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.". Some parents are trying to raise money for their children by mortgaging their own homes. Equity release, a type of ‘reverse mortgage’ that does not need to be repaid until the house is eventually sold, can leave parents trapped in a home unsuitable for them in later life if the equity they are left with depletes as the mortgage interest rolls up with the original loan, leaving them unable to buy another property to move to. Transferring property to your children like this does NOT protect your home. Whether avoiding the care and support charge was a significant motivation; 2. Be proactive – the sooner you place all your assets in a trust the more likely it is that this strategy can protect wealth further down the line. There are certainly ways to minimise tax while maximising control and still meeting your objectives. Can you avoid care home fees? If you declare the money to be a gift, but it isn’t, that’s mortgage fraud. You might think that transferring ownership of your property to a family member may help you qualify for state-funded care in later life. To find out more about how you can plan for care home fees, to discuss your circumstances and for more information about the fees involved, please call us on 0161 330 6821 or fill in our online form. Taxes and fees can't simply be avoided by giving the gift to the recipient in person, though the recipient can use a personal exemption for gifts if they transport them. 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. There is, however, evidence that some people are using the money they have set aside for their retirement. You can get help with paying for your care from your local authority but this is means-tested and your savings and any property you own will be taken into account when determining your eligibility. But all is not plain sailing, particularly in respect of property purchases. There’s not much point in giving money to one charity if you find yourself so hard up that you end up becoming the recipient of support from another. We start by filling a piggy bank with coins, then put money aside for education, save up for a car, for a deposit on a house and – the big one – for our retirement. If you are concerned that in the future you may need residential care or have to pay nursing home fees… A nursing home costs more than £40,000 a year. If one or both parents ask the Council for help paying their care fees in the future, a Social Services’ financial assessment will look at their assets. This means that increasing numbers of families are having to consider the costs of paying for care at a nursing or residential home, costs which are now exceeding £1,000 on average per week. 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