Care Home Fees
The cost of care home fees can rise into the tens of thousands meaning that the family home could be at risk of sale in order to cover those costs. This could also mean that any inheritance left to loved ones may be depleted.
To avoid this, many people think about transferring their property to their children or putting the family home into Trust. However this does not automatically mean that the family home is safeguarded from care home fees.
Moving into a care home is a stressful and emotional time, often made worse by the financial worry about how the care is to be funded. Initially the Local Authority will undertake a financial assessment which is means tested to calculate the contribution towards the fees. As a general rule, if a person’s accumulated assets are worth more than £23,250.00 in England and Wales, then it is likely that you will have to pay for your care homes fees.
The family home is often the largest and most substantial asset and is therefore often looked upon to sell in order to fund the care. As part of the financial assessment, the Local Authority, will enquire about any previously owned assets and take into account any reasons as to why any assets or property has been transferred or gifted to other people.
If at the time of the transfer or gift it could have been reasonably expected that care and support would be needed, then the transfer could be treated as a deliberate deprivation of assets and could still be taken into account for the calculation.
There is an opportunity to rebut this if good reason for transferring the property can be shown, however, there is no time limit in which the Local Authority can treat you as having deliberately deprived yourself of an asset.
Ultimately then, the Local Authority could force the sale of the property or even send the invoice for care home fees to the joint owners of the property or trustees of the trust.
There are numerous considerations that need be taken into account by the persons making the transfer or gift before making that decision. Such as the ability of joint owners to force the sale of the property, the property or share of the property becoming part of assets in a divorce or bankruptcy. The joint owners may not wish to force the sale of the property, but they may have no choice or say in the matter.
Understandably many people wish to ensure that their accumulated wealth passes to their chosen beneficiaries, however, transferring or gifting assets is not always the solution and does not always mean that those assets are protected. It is important that you make the right financial decisions for you and your family and speak to one of the members of our Wills and Probate Team so an informed decision can be made.
To discuss planning for your future please speak to a member of our Wills & Probate Team.