Consumer rights: 'Is my share of the family home at risk?'

Problems might arise when elderly parents go into a care home and one of their offspring still has a stake in their property


Q. My parents are in their late eighties and recently decided that they can no longer live in their home. They've refused to move in with any of the family. We've spent a lot of time visiting possible places and found one with a good reputation where they can be together. Everyone is happy.

However, I own half of my parents' home. I went back to live with them 20 years ago after my divorce. I had half of the proceeds of the sale of the home I'd bought with my husband. My parents needed a bit more income so we had their place valued and I bought half. It was all done legally and it helped us all out. I know my parents will have to contribute to the costs of their care and they both get state pensions. I don't need the house now, or the money really, as I've remarried and have a good job, but I don't want to sell either.

There was always an understanding in the family that the house would eventually be mine and I'd like to keep my money in the property for my children. Will we be forced to sell and will I lose my share?

JJ Liverpool

A. The rules about property and going into care are complicated. I wonder whether the local authority social work (or adult care, as it's sometimes called) department has been involved yet in the decision of your parents to go into care. If your parents aren't able to pay for the total costs of their care themselves, the local authority should be called in to do an assessment of their needs. If it agrees that your parents need care outside their own home it will do a means test of their income and capital including any bonds or stocks and shares. Unless the home can be disregarded it will include the value of your parents' share of the property.

If your parents have more than the threshold in capital, which is £23,250 at the moment, they will have to pay the total costs. If they have less than that but more than £14,250, they will be assessed as having some income from that money. Their income from any source including their pensions and any other benefits will also be taken into consideration.

The Charging for Residential Accommodation Guidance are the rules the local authority should follow. If one of your parents had been staying on in the family home while the other went into care, the value of the property would have been disregarded. If someone such as a daughter or son over 60 had been living there, again it would be disregarded and there are other cases in which this can happen.

In your case, though, there doesn't seem to be anyone who will go on living there whose needs would cause the value of the house to be disregarded. So the local authority will have to take the value of your parents' interest in the house into consideration.

They can't assume that to be half of what the house would make when sold but the real value of their share currently. That share would be worth only what someone would pay for it, given that you already own half. If you don't want to buy your parents' share it's unlikely that anyone outside the family would want to either, so the value could effectively be nil.

The Local Government Ombudsman has suggested that, when challenged, local authorities would need to have "significant evidence or opinion giving it reason to disagree" when refusing to accept that an interest in jointly owned property has a low or nil value.

You don't mention whether your parents are getting any other income other than their pension. The local authority would expect them to claim any other benefits that they might be entitled to. Because of that and because the rules around the property are so complicated, I think it would be worthwhile taking some specialist advice on this.

The rules are also slightly different in England, Scotland, Wales and Northern Ireland.

The charity Age UK has a series of fact sheets and local offices where you should be able to get all the information you need. Contact Age UK on 0800 169 6565 or online at ageuk.org.uk.

Q. I've been asked to be a trustee of a local charity, and having talked to the chair and the treasurer, I have discovered that there are money problems. This is hardly surprising when local authorities have to cut the funding they give to so many organisations, but it made me wonder what would happen if the charity went bust and left creditors unpaid. Would I be in any way liable for those debts?

DT Colchester

A. As a trustee you have a responsibility to make sure the charity is run properly. You have a duty of care to the employees, volunteers and clients and to the organisation as a whole. Part of that obligation is to make sure that the finances are in order.

However, trustees of a charitable company do not normally have personal responsibility for contracts or debts. They are not normally held individually liable for negligence.

That's because the charity is a company limited by guarantee and a legal entity in its own right, and agreements and contracts are taken out in the name of the company rather than individual trustees. Instead, members of a charitable company guarantee to pay a nominal sum such as £1 if the charity becomes insolvent.

The charity commission has the power to relieve a trustee of any liability if they have acted honestly and responsibly.

However, to be on the safe side, it is sensible for all trustees to have indemnity insurance. This can be bought for all of the trustees on one policy and charity funds can be used to pay the premium. Trustees who can afford and want to contribute towards the costs of the insurance can make a contribution.

You'll find more about the responsibilities of charity trustees from the Charity Commission at charity-commission.gov.uk.

www.moneyagonyaunt.com

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