Care Home Fee Myths: Resolved!


Care Home Fee Myths

 

There are a number of myths regarding people’s responsibilities to fund care costs and ways of avoiding having to pay for care in the future.

 

Unfortunately, as the population is getting older, the chance of people having to go into care in the future is growing. People are understandably keen to avoid paying care costs where possible, however there are a number of myths regarding care costs which could lead to you making a bad decision regarding your finances.

 

1.       If I give my property to my children I won’t be responsible for my care fees

This is not true. Where you give away assets with the aim of avoiding paying care costs, the transaction is challengeable by the Local Authority as a “Deliberate Deprivation of Assets”, which means you have deprived yourself of the asset with the sole aim of avoiding paying the costs of care.

 

The Local Authority can challenge the transfer of your property and if you cannot give evidence of a satisfactory reason for transferring the property to your children, the transfer can be potentially reversed and you can be treated as still owning the property when being assessed for your responsibility to fund your care.

 

Another potential problem which can come to light is if you fall out with your children, if they divorce, are declared bankrupt or pass away, all of these factors could lead to you potentially losing your house.

 

2.       If I give my house away but then survive 7 years it can’t be treated as part of my estate in assessing care home costs

 

This is also not true. The 7 year rule relates to Inheritance Tax, which requires you to pay Inheritance Tax on everything you have when you pass away and everything you give away in the last 7 years of your life.

 

There is no limit to the amount of time the Local Authority can look back into your affairs when considering assets you have given away to avoid paying care fees.

3.       If I put my property into trust I will avoid paying care costs

Again, this is not true and works the same way as giving away your property to your children. If the sole intention in putting a property into trust is to avoid paying care home costs then it can be challenged by the local authority.

 

However, if there is a legitimate reason other than care home fees, which lead you to putting the property into the trust it is still possible to do so.

 

4.       There is no way to reduce care home fees!

Once again, this is not true! There are methods people can follow to try to ensure the maximum amount possible from their estates passes to their loved ones and is not used up in care costs.

 

A common method is for couples to establish a trust in their Wills, meaning that when the first of them passes away, their half of their property passes into trust (allowing the survivor to carry on living in the property) but holding the capital on behalf of other beneficiaries who will ultimately receive the property when the second partner passes away.

 

Unfortunately there are no fool-proof ways of not having to pay care home costs, however if you wish to take action it is always best to speak to a qualified solicitor first.

Comments

Post a Comment

Popular posts from this blog

Find my Will! A blog on lost Wills and how to stay one step ahead!

Find my Will! A blog on lost Wills and how to stay one step ahead! Finding a lost Will is no easy task and the trap of losing your Will is something that happens oh so easily.   Like a mobile phone down the sofa or remembering where you put your keys, legal documentation   is no different! You might at this stage be asking “how could I lose something as important as my Will” but you’ll   be surprised at how easily it happens! One of the most common ways that a Will is lost is by self-storage. “If I make the Will and store it myself, it can’t go missing right?” However that is often the problem. Because a Will is so important, and the content so sensitive, they often get hidden away. This means that they may be safe from prying eyes, but in later years or during a house move or clear out, a Will could often be lost. It could also be that you pass away and your loved ones are struggling to find your Will. If there isn’t a clear indicator as to its location, it cou...
Read more

Organ donation and your Will: Make your wishes known!

Organ donation and your Will: Make your wishes known! On the 1st December 2015, Wales made history by becoming the first country in the United Kingdom to create an “opt out” system of organ donation. Formally introduced by the Human Transplantation Wales Act, the plan was to combat the lack of organ donation by making everyone an organ donor unless they formally registered their wish not to be. Over two years on, it would appear that the scheme, although still in its infancy, is still creating waves with both the English and Scottish parliament considering whether to also implement such schemes. This also comes at a time when the number of organ donors is at an all-time high, with a report today detailing an astounding 11% increase in 2017. Given the recent implementation of such schemes, you may be left wondering where you stand on compulsory organ donation, and the toss up of helping others when you’re gone against the right to decide what happens to your body after death...
Read more

End of life care and Lasting Powers of Attorney: Giving power back to your loved ones.

End of life care and Lasting Powers of Attorney: Giving power back to your loved ones. By Samuel Amer On the 30 th of July, the UK Supreme Court handed down an unprecedented decision. The court held that when an individual was in a permanent vegetative state, and there was an agreement between the family and doctors, medical staff could withdraw food & water from the patient allowing them to pass away. This decision is seen as quite a departure from legal precedent. Previously families and doctors who were in agreement would have to endure an agonising process of applying to the Court of Protection to have life sustaining care removed. Although some groups feel that the decision is inhumane, many people who have endured the terrible situation of watching a loved one needlessly remain in an undignified state have welcomed the ruling. As the nation’s aged population increases, it’s the case that more of us have developed our own views on end of life care, and also...
Read more