Care Costs

As you get older it may be necessary to buy personal or residential care. This type of care can prove quite costly and can have a detrimental effect on the value of your estate.

The average fees per week in a single room in a residential home are £270.00, rising to £370.00 in a nursing home.

Costs of care have to be met, even if this sale of property and assets.

There are some exceptions to this rule such as if a partner or dependent relative still lives in the property, or if enough money can be made by renting the property. The Local Authority can use their discretion to ignore the value of your property if someone else who has been caring for you for a substantial period is still living there.

If your estate is worth £18,500 or less then there are means tested options available to pay for care.

Deliberately Giving Assets Away To Avoid Care Charges

Many people faced with the possibility of needing care choose to give away their property and assets in order to avoid having it swallowed up by care charges. The possible pitfall with this is that the Local Authority who will assess your claim for residential care could discover what you have done and pass the liability for your care charges onto the recipients of those assets.

Even if you give the gifts away 6 months previous to needing care and their records pick this up, the recipient can still be made to pay. There is no definitive time scale as to how far back their records can go and there are no hard and fast rules which apply to the legitimacy of giving gifts.

Those who deliberately give assets away before applying to a Local Authority for residential care may be considered to have 'notional capital' or income. In other words they can be assessed as still owning the assets given away.

Not Deliberately Giving Assets Away To Avoid Care Charges

As mentioned previously there are no hard and fast rules for Local Authority's to decide on whether a gift should be used to pay for care. Even if the gift was not made to avoid paying care costs, it is largely dependent on what the Local Authority decides.

Another pitfall of giving your assets away is that when you need care you are not able to pay for it and could end up in a not place of your choosing or even sharing with a stranger.

To avoid this it is worth considering trusts. Trusts enable you to retain your right to the property or income should you go into care. This may also make the Local Authority less inclined to scrutinise the transaction.

Change Of Law

There is a possibility that a new Health and Social Care Bill will change the way costs of care are met by declaring that the cost of nursing care (not personal care, such as being dressed) will be met by the NHS.

Scotland aims to pay for all care but there will not be any opportunity for English citizens moving to Scotland to make use of the more lenient laws. They will still be subject to English law.