Legal Q&A: what is deliberate deprivation of assets and why can't my mum gift herself my grandmother's house?

My Gran has dementia and needs to go into a care home. Can my Mum gift herself my Gran's house to stop us having to use it to pay her care home fees?
Alamy Stock Photo
Fiona McNulty1 October 2018

Question: My Gran is 92 and has dementia. She has been living in London with my mother, who can’t cope with her any longer and thinks she should go into a care home where she could get the special attention she needs.

My mother has power of attorney, so could she gift to herself my Gran’s house, which is worth about £350,000, to stop our inheritance being used up on paying care home fees?

Answer: The local authority should assess your grandmother to see if she is in need of community care services and if she is, then she will be subject to a financial means assessment.

As she has assets worth more than £23,250 she will not be eligible for local authority funding and will have to pay her own care home fees.

If your grandmother gifted her house to your mother when the current intention is for her to move into a care home, the local authority would deem that to be a deliberate deprivation of assets, as the property would have been gifted to increase your grandmother’s eligibility for local authority funding.

Where there has been a deliberate deprivation of assets the local authority can take into account in its financial assessment the value of the asset that has been disposed of.

Accordingly, the value of your grandmother’s property would be counted as notional capital and would be added to her other assets to calculate her total assets.

This means that her assets would still amount to more than £23,250. Therefore, she would be ineligible for local authority funding and the local authority could claim from your mother the care costs for your grandmother, as she is the recipient of your grandmother’s asset.

In any event, even if your mother is her attorney, as your grandmother has lost capacity your Mum would not be able to make large capital gifts without a court order.

These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.

If you have a question for Fiona McNulty, please email legalsolutions@standard.co.uk or write to Legal Solutions, Homes & Property, Evening Standard, 2 Derry Street, W8 5EE. Questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.