Boris Johnson promised to reform the funding of elderly care in July 2019. Since that time families have paid out in excess of £14 billion or £21 million every single day! This shouldn't surprise you when you consider that the average cost of a care home is £6,000 per month per person.
When someone is taken into a care home they have to undertake a financial assessment which determines if they are to be 'self-funding' or whether they will have their fees paid for by the Local Authority. If you have assets in excess of £23,250 you will be self funding and if the value of your estate is predominantly in your home, then that will either need to be sold to fund your care or, alternatively, an ever increasing debt will be charged against it which will need to be paid by your beneficiaries from your estate when you die. This generally results in the family home ultimately being sold unless the beneficiaries have sufficient access to capital themselves to repay the debt.
If you try to pass the ownership of your property to someone else during your lifetime or perhaps transfer it into a 'Family Trust', that is classed as deprivation of assets and is not allowed. The gift of the property will be 'looked through' and whoever has received it will either have to return it to you or, alternatively, pay your care fees themself.
Confusion arises among many with the several year rule (which only applies to gifts for inheritance tax purposes). It does not matter how many years your survive out of a nursing home environment for the value of the gift to be added back into your estate for nursing fee purposes.
We are consulted by many clients who have been persuaded (usually at a cost of several thousands of pounds) to transfer their homes into trust during their lifetime with the promise that this will protect the asset from nursing home fee assessment. It won't!! Very often the company dealing with this for them have named themselves as trustees which can cause huge problems when trying to either dissolve the trust or sell the property. Effectively by naming the personnel of these companies as trustees, you are losing control of your own home as they will need to sign any paperwork in the future to being the trust to an end.
Unfortunately very little can be done at the current time to ensure that your estate remains in tact for future generations unless you are married, under which circumstances it may be possible to safeguard 50% of your joint estates but this is only possible after one spouse has died.
This is a topic that is of great importance to the majority of older people as well as their children who unfortunately can only watch as the assets built up over a lifetime of hard work and paying taxes with the intention of helping future generations, is decimated.
If you would like further information on asset protection wills, please do not hesitate to contact us.
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