Paying for care, if you need it, is expensive
Samantha Lowthorpe, 20th April, 2020
The average cost of care in England is £600-£800 per week, which varies based on your location, the type of care you may require and the type of accommodation you chose. Here are some details of when you can expect to pay for your care and what we can do to help you with care fee planning:-
When will I need to pay for my care?
Care fees will be payable if you have assets over £23,250. Your income will be taken first, and any shortfall will be deducted from your assets. If this applies to you then you can claim Attendance Allowance.
If you have assets between £14,250 – £23,250 you will have to make a contribution towards your care fees.
If your care consists of residential care and nursing care, the NHS may contribute to the nursing aspect of your care fees and in some, very limited circumstances, despite the value of your assets the NHS may fund your care if you have a primary health care need. This would require an assessment by the Local Authority and NHS (see blog regards funded care in these circumstances).
What can we do to assist?
There are a number of options we can assist you with in order to protect some or all of your assets.
If you own a property jointly, your share of the property will pass automatically to the survivor (usually your spouse or civil partner). If one of you require care the property would be disregarded whilst your spouse remains living there. However, the full value of the property would be considered for care fee purposes if one of you were to die. We can take steps to sever the joint tenancy and prepare a Will, leaving your equitable interest in the property to chosen beneficiaries rather than your spouse to ensure it does not become part of your spouse’s estate for care fee purposes.
In order to protect the survivor, we would provide them with a right to occupy your share of the property during their lifetime in your Will. Doing this would protect 50% of the value of the property. However, it would not be successful if both parties required care at the same time.
Another option available is to transfer property, which would potentially protect the full value of your property. However, this option results in you no longer owning the property and can result in you losing control of the property, amongst other issues. We would therefore recommend using a trust where as a trustee, you would retain control of the property.
Creating a trust or transfer of property does have pros and cons. The most important one being that you would no longer own the property. You should also be aware that any transfer of assets would be subject to the local authorities Deprivation of Capital rules.
Deprivation of Capital (“DOC”) rules
The DOC rules say that at any time a local authority may assess a persons assets as though they still own assets transferred out of their estate, provided that both of the following applies:-
- Assets were transferred for the sole purpose of avoiding care fees; and
- At the time the transfer took place, you should have reasonably anticipated the need for care
In view of this we would need to carefully consider any current health issues, whether you are living independently or require some form of assistance and whether you anticipate any care needs in the future. Despite carefully considering your circumstances, there is no guarantee the local authority will agree you did not deprive yourself of capital.
If the local authority were successful in applying the DoC rules, they would assess your financial status as though you still own the assets you transferred out of your estate.
Want to review care fee planning and your options in more detail? Get in touch today...
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