Long Term Care Planning
Many people are concerned at the prospect of having to spend all their money on paying for long-term care in their old age and leaving their children with little or no inheritance.
Even if leaving an inheritance is not your priority you may be concerned as to how you will cope with old age and avoid becoming a burden on your partner or family while paying for your own care.
According to statistics:
- 4 in 10 people in care homes pay for themselves
- The average cost of a residential home is £37,440 a year
- The average cost of a nursing home is £38,736 a year
- Almost 50,000 elderly people who do qualify for means-tested council-funded care are forced to make up the shortfall between that funding and care home fees.
Local Authority Assistance
If you become unable to look after yourself, and you require care either in your home or in a residential home, your Local Authority will assess your care and financial needs. If you have capital of more than £23,250 (which can include your home, but it may be excluded from an assessment in specific circumstances), you will be entirely self-funding. If you have capital of more than £14,250 you will be expected to partly fund your care.
You may have read about the care cap to be introduced in April 2020. The opinion of most professionals is that most people will benefit very little from the care cap of £72,000. The cap is the maximum amount that an individual must pay for care, however, this is calculated by using the Local Authority Rate for a care home and not the “self-funding” rate, which is often much higher. It is thought that the average person would need to spend at least 111 weeks before reaching the cap. The average stay in a care home is 130 weeks. Even once the £72,000 cap has been reached, the State will only pay the Local Authority Rate, leaving the “self-funder” to pay the balance.
Protecting your Assets
If one of a married couple or registered civil partnership goes into care, and their partner remains living in the house, the local authority disregards the value of the house when assessing the contribution to care fees. There are other limited circumstances where the house may be disregarded.
However, if one of a couple dies and the house passes to the survivor, who then goes into care, the whole of the value of the house will be available to pay for care fees. This can be avoided without affecting the security of either of you, by changing your Wills and by a simple alteration to the title of your property. This is a very effective way of preserving a portion of your Inheritance.
Please speak to Louise Bunn at Gordon Dean Solicitors on 01603 767671 or email her at firstname.lastname@example.org if you would like to know more about this complex area of law.
(Information correct at December 2016)