Care Fee Planning

With an ever aging population many of us or our loved ones will need some care in later life. The current rules provide for extremely limited situations where care and accomodation might be free, but generally a financial assessment will take place. For those with assessable assets in excess of the upper limits, the full care home fees are payable. Assessable assets will almost always include the value of a property and cash, although there are some exceptions. For example, a mobile home should be disregarded in a financial assessment, as should investments known as investment bonds.

There are ways to protect assets legally, such as a couple signing carefully drafted Wills to protect their property. But there are a lot of unregulated companies that offer schemes to guarantee to protect a property, simply by giving it away. Unfortunately, the reality is somewhat different. The Local Authority rules are clear and gifts of any amount, made at any time, can be taken into account if the reason for the gift was to avoid paying care home fees. The problem is that by the time the truth is realised, the person who gave their property away is probably in a care home and the company that offered the guarantees may not be in existance.

For those who do not have time on their side because they are about to go into or are already in a Care Home, planning in advance is no longer an option, but action can still be taken. For example, the sale proceeds of a property can be invested to provide an income, or used to purchase an Immediate Care Fees plan.  This is a policy that could pay the difference between the residents income and the Care Home Fees that are due.

Whilst the Government is setting out its plans to meet the growing cost of care, it is importanant to note that the Governments definition of care does not include accomodation costs.  Accomodation costs can represent half of the weekly charge in a care home, so clearly any Government assistance with the cost of care is still going to leave a large bill to pay.

Legal and Independent Financial Advice should be sought sooner rather than later in order to protect an inheritance for the next generation.

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