09.02.16

Planning for later life

In the second of our blog series we discuss the implications of avoiding paying your future care fees.

We regularly hear our clients and friends saying that they want to protect their children’s inheritance and don’t want to be forced into selling their house to pay for care, if they do need to go into a residential care facility.

It’s understandable that you want to leave as much money as possible to help your children, relatives or friends after you pass away. However, the law states that people with assets of over £23,250 are expected to meet the cost of their own care. If you own your own home, you will very likely fall into this bracket and may have to meet the cost of all or some of your care in the future.

Deprivation of assets

Each week there are articles in the papers about this issue and plenty of companies are offering schemes to avoid care fees.  Whilst their promises to avoid care fees may be tempting, the schemes usually involve giving assets away or putting them in Trust so you no longer own them.

Aside from the risks of giving up ownership of your assets, these schemes are now on the radar of many Local Authorities and, where a person has given up ownership of assets to bring down their asset capital for the purpose of qualifying for care funding, this is known as a ‘deliberate deprivation of assets’. If the Local Authority finds evidence of a deliberate deprivation, they can take these assets into account when assessing the contribution to care fees.

With the pressure of government finances, it is likely that any deprivation of assets prior to needing care will be scrutinised to determine if there was a deliberate intention.

Leaving your care options to the Local Authority

Even if you could reduce your assets below the capital limits, do you really want to leave your care options to the Local Authority? If the Local Authority are paying for your care they will firstly have to assess your needs and then decide how best to meet those needs.  Although they are required to meet your needs, they have a huge amount of discretion as to how this is done and the cost of doing so can play a large part in their decision making.

Some issues we see are:

  • your perception of your needs may not match their assessment;
  • they may decide that residential care is more suitable to meet your needs even if you would prefer to receive care at home;
  • the care facility they offer is one you wouldn’t choose to live in yourself
  • the care facility could be further away from your family and friends than you would like it to be

If you are financially able to have the option and the choice in your future care, consideration needs to be taken about the priority of this over inheritance; thinking carefully about the reality of not paying for your care fees and what the implications of this could be is extremely important.

There may be things that can be done to protect some of your assets, but again this needs to be weighed up carefully against what care you would like for yourself in the future.

To discuss your options in relation to paying for your future care needs please contact us.

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