Care Home Fees – TIPS – How to protect your assets

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How to Protect your assets

You may already know that paying for care home fees is subject to means-testing however did you know that the home can be disregarded from the test if it is still occupied by the husband or wife?

elliot brown flick clockOne spouse going into care

But what happens when the husband or wife is no longer living there? Say, for example, they too go into care or they may die. It is likely that the property would have been held by the couple as ‘joint tenants’ meaning that, on death, it would pass to the survivor of the marriage and overrule anything contained in the Will.

The problem here is that now all the couple’s wealth in the property is in the hands of the surviving husband or wife in the care home. The whole value of the house is now contributed to the means test. If this happens it is likely they will be over the means-tested threshold and therefore will be liable to pay for their own care in full. Garner & Hancock can advise you how the means testing works.

One way is “severance”

With foresight and adequate planning the possibility of this situation can be reduced. By severing the ownership of the property from a ‘joint tenancy’ to ‘tenants in common’ and making specific changes to the Will the deceased husband or wife’s share of the home can pass under the Will away from the surviving husband or wife who is in the care home. Garner & Hancock can advise you on whether you should sever the joint tenancy.

IMG_1952Other ways we can advise you protecting your assets

  • Other ways you could consider protecting your assets.
  • Deed of Trust
  • Transfer of property
  • Equity Release
  • Investment
  • Discretionary Trusts
  • Lasting Powers of attorney

The Current Position for a Local Authority Assessment.

  • A person with capital over £23,250 is self-funded.
  • A person with capital between £14,250 and £23,250 receives some State assistance.
  • A person with less than £14,250 has their care paid for by the State unless this can be met from their income.
  • A Local Authority pays at least £100 – £200 less per week for a care home than a privately paying resident.
  • The capital value of a property is completely disregarded if it is occupied by a spouse or civil partner, or relative who is over 60 – there are other disregards.

 We can help you with an early assessment

d7b13682cc9824911e83dbc66464c777_400x400New Proposals due to come in in 2020.

  • Are not yet law and could therefore change.
  • Are not due to come in until 2020, owing to fears voiced by local authorities about the potential cost of the cap and that the private insurance market had not developed products as expected to help individuals fund the initial £72,000 as they progressed towards the cap.
  • Propose to cap care home fees at £72,000 per person – but this is based on the notional amount a local authority will pay.
  • The ‘cap’ does not cover board and lodging costs which will have to be paid on an annual basis – probably around £12,500 p.a.
  • The State will provide some financial assistance to people with capital between £17,000 and £123,000.
  • Are unlikely to be retrospective.

IMG_7881Things to consider if a relative is likely to need care

Request an assessment from the Local Authority.  The Local Authority has a duty to assess social and medical needs before they carry out a financial assessment.  This may result in your relative receiving a non-means tested contribution to nursing costs.

  1. Make sure they are in receipt of all relevant benefits – particularly Attendance Allowance (non-taxable and is not means tested).
  2. Do they qualify for continuing care?  If so, care costs are fully covered by the NHS.  Very few people receive this but consider asking for a re-assessment if your relative’s condition deteriorates. {click here for more advice}
  3. If they are to be self-funded – take financial advice – explore the costs of a care plan which can ‘cap’ the capital cost of care – an annuity is purchased which makes up the shortfall between income and cost of care – income produced can be tax free.
  4. Have they made a Will and a Lasting Power of Attorney for Property & Finance.

Garner & Hancock  can advise you as to the steps you can take to reduce the impact of care home fees on your estate.

2016-01-03-21.47.17-768x1024Risks of Transferring assets

We will talk to you about the risks involved in transferring assets to your children and make sure that you understand the consequences of your decisions.

1. You children could divorce or go bankrupt

2. Relations may change over time and any transfer is irreversible

3. You needs may change

4. You lose all control over your assets.

These considerations must be made now so the more time you give to your plans to take effective the more you will leave to your loved ones.

Speak to Niamh Murphy and Richard Hancock in our Private Client Department on 0208 232 9560 (press 1) for free initial legal advice.