There are now nearly 14.5 million people in the UK aged 60 and above. The number of people aged 60 or over is expected to pass the 20 million mark by 2031, so chances are, you or someone you know will need to think about care options in the next few years. Nursing home fees have hit the headlines following the Dilnot Commission’s recommendation to cap the cost of care and the Care Bill is now working its way through parliament to introduce changes from April 2017.
At the moment, anyone with assets worth over £23,250 will have to pay for their own care without any help from the state. This often brings the worry that their home will have to be sold leaving very little left for their children to inherit. The Care bill will increase this limit, and it is expected to go up to £123,000. Local Authorities will have a duty to offer deferred payments, which are only offered in some circumstances at the moment.
Some people try to give assets away before going into care, but gifts can be overturned if they were made to reduce the assets available for care fees. Local Authorities can look at gifts made in the 6 months before going into care, but may be able to overturn arrangements made years before if there was an intention to defraud creditors. The Care Bill will give Local Authorities further powers to enforce debts. A challenge by the Local Authority could cause legal problems and additional distress on top of the stress of moving a vulnerable relative into care.
Although there is nothing wrong in making gifts, you should think about whether avoiding care fees are a significant factor in your decision and whether it will be scrutinised in the future.
The proposed cap on care fees, expected to be £72,000, does not cover all of the costs encountered when living in a care home. The ‘bed and board’ costs of food and accommodation could be around £12,000 a year and would still need to be paid once the care cost limit has been reached.
Even if costs are capped, the on-going management of the person’s assets poses problems if they can’t make decisions for themselves. Whether the house is to be sold to pay for care, or rented out to provide an extra income, someone will need to make these decisions and deal with banks, pensions and any other assets.
If there is a Lasting Power of Attorney in place, the nominated people can step in and manage the person’s money. If not, the Court of Protection would have to appoint someone, usually a friend or relative, as Deputy to make decisions. A Deputy has to report to the Court and pay fees every year, but an attorney does not have to meet these requirements. Making a power of attorney now could make arrangements easier in the future.
If you think about your assets and how they might be used to pay for care you can make sure you, or your relatives, are prepared if the time comes to move into care. Everybody’s circumstances are different, so if you would like advice on care fees or on planning for the future, ask to speak to one of our specialists in estate planning and powers of attorney team, they’ll be happy to talk things through and advise on your options.Back
Gill Gange - Business Development and Marketing Manager
To discuss how Glaisyers can assist you contact Gill Gange on [email protected] or via 0161 832 4666.