Clarity on Care
As the population continues to age the funding of care continues to be a concern to many. There is considerable misinformation regarding who pays for care, how much they pay and what – if anything – can be done to address the issue.
Currently anybody with assets over £23,250 is required to fund their care in full, financial support is available between £14,250 and £23,250 and once you are below just £14,250 worth of assets remaining, full financial support is available.
The cost of care can vary from £1000 for basic care to £2000+ per week, so it is easy to see how quickly assets are eroded. In the past many have chosen to transfer assets, specifically property, to their loved ones, however, this can lead to all manner of complications and with cash strapped Local Authorities seeking every penny, they may see it as a deliberate attempt to deprive yourself of assets. If they deem this to be the case, then they will attempt to claim the assets anyway.
Asset Trusts
A Trust cannot be taken to deliberately prevent care fees. However, if a Trust is taken for legitimate purposes such as Inheritance Tax Planning, elimination of Probate or prevention of claims against an estate - the legitimate purposes give overwhelming benefits that cannot be achieved through a will, therefore the Trust has been created legitimately, and deliberate deprivation of assets has not been committed.
With care fees often costing thousands of pounds per month, many feel that it is unfair to work all their life only to have their home and savings taken away in their final years. If at any time you choose to release money from the Trust to pay for your care, then this is always possible.
The Trust enables your Trustees to better manage your assets and address the issue of care home fees. The Trust offers effective protection from care home fees provided that at the time the assets were protected it was not reasonably foreseeable that you would need to go into care. If you transfer assets into the Trust at the time when you are about to go into care, no harm is done and all the other benefits of the Trust still apply, but the local authority may be able to recover some or all the cost of your care from your Trust.
Statistics show around 1 in 3 woman and 1 in 4 men will require a form of care later in life. If you have assets over £14,250 you will pay towards the cost of your care and in some circumstances, you may be required sell your home to cover the costs. It is increasingly important that professional advice is sought.
