8 SIMPLE WAYS YOU CAN AVOID PAYING CARE HOME FEES
ARE YOU CONCERNED ABOUT LOSING YOUR ASSETS TO FUND CARE HOME COSTS?
At present, 1 in 3 women over 65 and 1 in 4 men are likely to go into care. If you go into care, the Local Authority can take almost everything that you own to pay for your costs. That includes your home. With the average cost of care reaching more than £1,000 per week, and the average stay lasting 3 years, the calculations are simple. You could be facing costs in excess of £156,000 and the Local Authority have the right to use your assets to pay for these costs. Furthermore, any attempt to avoid paying these costs might be seen as a deliberate act of deprivation and the Local Authority could prosecute you as a result
Care home costs have risen at double the rate of inflation over the last 20 years...and are expected to hit £1000 per weekDaily Mail
FIND OUT HOW YOU CAN AVOID THE RISING COSTS OF CARE HOME FEES WITH OUR 8 SIMPLE TIPS GUIDE
We are Private Will Services. We are a Wills & Trust company based in Hampshire, and we are members of the Institute of Professional Will Writers. We operate under a code approved by the Trading Standards Institute. We look after many clients interests by providing the right Wills and Trusts. In our experience, dealing with the need for care is overwhelming in itself, without the added burden of managing your assets at the same time. Therefore, the important piece of information to take away from this guide is – whatever you decide to do about protecting and preserving your assets, do it early.
We have compiled the following 8 tips to give you important information that we hope will empower you to make good decisions early.
1. Don’t give away your house!
You could transfer your assets to your family and many people do. There are several reasons why this is not a good idea. Firstly, the Council is able to come after these assets under the deliberate act of deprivation rules. Potentially this has no time limit, therefore an asset gifted many years earlier could potentially be included in the assets of the person being assessed for Care Home Fees. In those circumstances Care Home Fees would not have been avoided.
Secondly, you also lose control of your assets and things can go wrong. If the family member falls out with you or gets divorced or is made bankrupt or dies before you, in each case there will be serious consequences for you. There are better alternatives.
2. if you are a couple, use a will with a right of occupancy
With this Plan we set up two Right of Occupancy Wills. When the first of the couple dies, his or her half typically goes to the children but the survivor is given the Right of Occupancy so that he or she is totally protected. If the survivor goes into care, half of the house is protected from the Care Home calculation. We offer several versions of these types of Wills.
3. use a discretionary trust will
With this plan we have two Discretionary Trust Wills. When the first of the couple dies, that one’s half of the estate (both house and capital) goes into a Discretionary Trust for the benefit of the survivor and typically the children. The survivor is a Trustee and therefore has a large element of control over that half of the estate. If the survivor goes into care, the first half of the estate (both house and capital) are protected from Care Home fee calculation. This type of Will does not have to be for all capital – and we can tailor the Wills to meet your unique requirements and explain any tax implications.
4. take advice early
There are options that you have which disappear if action is not taken early enough. If you are a couple, there are Wills that can be written to take advantage of this – and shelter some of your assets from Care Home fees. There are also options that will only work if you set up Trusts when your situation is most advantageous to you. As time moves on these options will diminish and some may even become impossible. Therefore it is better to start the discussions as early as when you are in your 50s rather than leaving it until your 80s. So contact us for advice at an early stage and maximise the choice of options that you have.
5. Use the couples rule to your advantage.
(What is this & why does this help me avoid care home fees?)
Under the disregard rule, property which is occupied by a spouse or partner of the person going into the Care Home is excluded from the calculations. Other reasons why property is excluded, is if a relative who is aged 60 or over is living in the property. The property is also excluded if the relative is incapacitated or is under 16 and the resident is liable for their care. If they are entitled to live there then the property is not included in the calculation of Care home fees. However, should either of you die or become mentally incapable before instructing us then some options cannot, unfortunately, be used.
6. Avoid cowboy trusts.
There are various schemes offered in this area but a careful approach compliant with the law and regulations must be followed. There are a number of mistakes that can be made in this area and many people have unfortunately been misled by dubious sales promises. All of our work is fully insured for up to £2 million per customer. If you talk to us, our advice is guaranteed.
7. Use a care home expert.
If you are exposed to costs, even after applying all the other tips we have given, there are expert services available to ensure you get the best provider for the costs paid, potentially saving you an enormous amount of money. We can put you in touch with experts to help you negotiate your way through the rules and expense involved. One area of risk is property that should be disregarded from calculations can have a first charge being placed on the property if the co-owner agrees to the property being sold to repay the fees. If joint owners consent, they are in the case of a spouse, potentially agreeing to making themselves homeless if their partner in care dies.
8. Use the local authority rules to your advantage.
Why and how does this help me avoid care home fees?
The local authority can help you with your first twelve weeks of care fees if, apart from your property, your other savings are below £23,250. Any help beyond this level will take the form of a loan.
Some options are not possible if the person has to go into a Care Home within 3 years or so of the action. Also knowing what the specific circumstances are of the wider family can be useful to create a thorough plan for the estate that addresses all of the issues that a family and the ultimate beneficiaries have.
You have an element of choice over which home to go to – any home must meet your assessed needs and be within the price that the local authority is prepared to pay to meet those needs.
If you want to move to a home that is more expensive, a third party has to pay the difference (‘top-up’). You cannot pay your own top-up from the capital you have that is below £23,250.
the average cost of a care home in the UK is £1,000 per week.
And many more homes charge in excess of this. Failure to plan your care needs may result in you forfeiting the majority of your assets when the Local Authority assesses your affordability for care. Our advice is always, Plan Early.
the average length of stay in a care home is 3 years.
At the current rates, this can lead to costs in excess of £150,000. The Local Authority are permitted to go after assets you own in order to meet these costs. Do you have a plan in place?
Any income is taken towards your care costs
However, your income contribution is usually well short of the total cost. It is the shortfall which is paid from your capital including if necessary, your house.
Mrs W transferred her property into Trust and we obtained consent from their mortgage provider to do so. When Mrs W was admitted into Residential Care, the Council attempted to recover the costs against the property but we successfully argued the clients case and it was disregarded for Care Costs
Mr B was in his 80's when he set up his Family Protection Trust. When the property was transferred into Trust and Mr B went into care, the Local Authority met the Care Costs and did not attempt to recover any of the costs from the property within the Trust. The house was therefore saved and Mr B will avoid probate costs at a later date
Mrs G owned her house with a small mortgage. Her son and daughter were concerned about care costs and probate costs and therefore sought our advice. We set up a Family Protection Trust but the mortgage needed to be cleared first. The son and daughter put up the funds to pay off the mortgage. The Trustees gave them a Security over the property. The Trust worked and the house was protected. When Mrs G went into care the Trustees sold the property. The son and daughter were repaid the morgage money. The balance was retained in the Trust for Mrs G's welfare.
IN A NUTSHELL
OUR MISSION IS TO PROTECT OUR CLIENTS FROM BEING DISADVANTAGED IN THE EVENT OF LIFE CHANGING CIRCUMSTANCES
We have helped many clients protect their assets using Trusts and Wills. We would love to do the same for you. If you have any questions about protecting your assets from care home costs, and yourself from legal complications resulting from deliberate acts of deprivation, why not get in touch with us today. Please feel free to click on the ‘Get in touch’ button and you will be taken to our contact page. Alternatively, please use the contact form at the bottom of this page, or simply give us a call on +44 (0)23 8007 0169. We look forward to helping you protect what is most valuable to you.