Care Home Fees
The cost of social care can be a very daunting subject. Latest research states that care home prices range from £27,000 to £39,000 a year, whilst nursing care can cost between £35,000 and £55,000. We have specialist solicitors dealing with care home fees and can advise on the best way to cover the required costs and plan your future.
Do I have to pay all my care home fees?
At present, the local authority will take into account assets worth more than £14,250 when assessing if you should contribute towards paying for your own care.
If you are assessed by the Local Authority as needing residential or nursing care, you would be means-tested to calculate how much you should contribute to the cost of that care. The means-test is compulsory and takes into account both your income and capital. If you have assets between £14,250 and £23,250, the council will contribute towards costs, but if your assets total over £23,250 you will be required to cover all care fees (known as self-funding).
What about my property?
The value of a property is currently disregarded if a spouse is still living in the house. However, if both of you/the survivor of you entered a care home, the local authority would take into account your share in the property and any other financial assets (ie shares, bank accounts).
In the scenario of a married couple, it may be worth them amending their Wills to leave their half share of the matrimonial home to a family Trust. The Trust will hold the half share of the house for the benefit of the survivor so that they can live in the house rent free during their lifetime. However the survivor would not be deemed to own that half share of the house if they were ever assessed in relation to contributing towards their care costs.
The Trust rules would state that the house could be sold, and the proceeds used to purchase a new property to cover the scenario of the survivor wanting to move or downsize.
Our specialist care home fees lawyers can advise you on the pros and cons of creating a Trust in your Will and discuss the options with you.
Can I give away my assets to stay under the £23,250 threshold?
You may decide to give away your assets prior to going into care; however, if the Local Authority believes you have done this with the motivation of deliberately depriving yourself of an asset to avoid paying your care fees, they could ignore the transaction and assess you as though you still owned the assets. Furthermore, if the local authority has been paying your care home fees and later discovers that you have gifted assets in order to avoid the costs yourself, they may be able to enforce powers of recovery. This means you or your beneficiaries could be required to pay back your care home fees in one lump sum.
How do I protect my assets from being absorbed by care home fees?
It is still possible to pass assets to family and friends, but this is complicated area and it is best to seek qualified care home fees advice from a solicitor.
Gifting assets is one way for you to ensure family or friends receive some sort of inheritance, but this should be done well in advance of moving into a care home. When your local authority conducts a means test, they will look at three main factors in gifting assets:
Amount – How significant is the amount you have gifted to a family member or friend?
Reason – What was the reason for gifting assets? Was this to avoid paying care home fees, or to give you the opportunity to see loved ones enjoy their inheritance in advance of you requiring care?
Time – When were the assets gifted? If this happened well in advance of you needing to go in a care home then this is less likely to be factored into the local authority’s decision. However if the transaction was more recent, this could be considered an attempt to avoid care home fees.
How can a care home fees solicitor help?
We have specialist solicitors who can advise how social services will assess your assets including property, investments, income and jointly held assets. We can also help ensure you do not overpay for care, advise on alternative funding options and assist with planning your estate.
What else should I consider?
There are a number of things you should also consider when planning care. These include:
- Make a Will – it is important to plan what happens with your assets after your death, otherwise the courts will make these decisions which may not be in line with your wishes.
- Create a Lasting Power of Attorney – should your mental health deteriorate you will need someone to make decisions on your behalf. There are two types of power of attorney available, one for health and welfare and another for property and financial affairs.
- Undertake Estate and Tax Planning – Inheritance tax has an effect on your estate if the assets (less any debts) are greater than £325,000. However, with careful planning through Wills, lifetime giving and the creation of Trusts, the influence of tax can be minimised. There may also be an additional allowance available if you own your home and are leaving it to your children (known as the residence nil rate band).