Once your savings fall below £14,250, only income is considered for a means-assessment. Could choosing one of care funding option mean that you lose your benefits? However, you need to be careful. Call The Care Home Fees Specialists Now. On the surface, it might seem like the perfect way to protect your children's inheritance, but local authorities are increasingly wise to these type of schemes, with teams in place to ensure residents are not using them to get out of paying rising care costs. Here is a video on how a care annuity works. Many people think that they can protect their assets from nursing home fees by just giving them away. How Much Is My Final Salary Pension Worth? You should not rely on this information to make (or refrain from making) any decisions. With these figures far removed from a pensioner’s typical income, the elderly and vulnerable are having to dip into savings or borrow from family to meet the costs. An advisor can help you look at your options as well as ensure you claim all of the benefits you are entitled to. You can read more here about how equity release works. 80 replies 5.5K views BML Forumite. Five top tips to avoid care home fees Be proactive – the sooner you place all your assets in a trust the more likely it is that this strategy can protect wealth further down the line. Question about your subscription? Is signing over your house seen as a deliberate deprivation of assets? One thing you may hear some recommend is what is formally known as ‘disposal of assets’. However, we would recommend you speak to a specialist before you do this:-. However, this is not straightforward and your local authority may look at whether you put your home in trust solely for the reason to avoid your care costs.". How much does a care home cost? Certain types of investment bonds are not included in the care home fee means testing calculations and it may be worth exploring these with a financial adviser to protect those monies should residential care become necessary. Many of the schemes are well presented and the advice given is utterly convincing, but the reality is that many such schemes are presented by salespeople more interested in their earning potential than the welfare of their Client. Avoiding care home fees - setting up a trust may help. Care home fees are expensive and can quickly and significantly erode the assets the elderly person was expecting to pass to their children. One of the best ways to  avoid care home fees is to use equity release to fund your care. If the NHS does not pay, the care given is subject to a means test. All funding options should be considered, and it is important that equity release is considered as part of that. Book an appointment to speak to a Trust specialist. The cost of care homes depends on where in the UK you live and what type of care you need. Bankruptcy – You never know what may happen in the future. care, and therefore the savings threshold for care home fees, You can find one in our directory of advisors, pros and cons of equity release on youtube. – The 20 most important questions to consider when thinking about how to avoid care home fees or home care costs, – Protecting your assets from nursing homes and how this interacts with the expectations of your local authority, – Putting your house in trust to avoid care home fees and what counts as a deprivation of assets, – How much can you keep before paying for care, – If you can you dispose of your assets before going in to care, – How to decide what the best way is to pay for your care costs. The main ways to avoid paying full care home fees 1 Local authority funding: The amount of local authority support you can get, if any, depends on where you live and your savings, assets and income. In a previous article on this web-site dated 18 July 2014, I outlined the basic rules relating to liability for care home fees, including the anti-avoidance ‘deliberate deprivation of capital’ rules. So, in the right circumstances, it is possible to avoid meeting care fees without it being seen as a deprivation of assets. The rise in care home fees is at least partly due to the increase in the national living wage which has put care workers over the age of … The rules are often set out in the trust deed and rules, and these dictate how the trust will work. This allows you to take money out of your home and avoid having to pay care home fees. Have you budgeted for either eventuality? Due to this, when the Trust is set up, it is registered with HMRC. Avoiding care home fees. We work with with Quadrant Estate Planning for them to bring you their market leading later life planning support. This is where individuals ‘hide’ their money, so it isn’t included in a means tests by their local authority or council. Those care home fees are, for most of us, a significant and unavoidable expense. Likewise, if you set up a trust, the local authority can still approach the Trustees of the trust, irrespective of the time it was set up. How much you can keep before paying for care, and therefore the savings threshold for care home fees, differs depending on which part of the UK you live: If you have savings and assets above this, then it is likely that you will have to pay for your care. In these types of cases, they may well challenge the reason behind using a trust. You can read more about the savings thresholds for England, Scotland, Wales and Northern Ireland below. The longer the time period from you transferring the house to your children to you then going into care the better the likelihood that this transfer will succeed in avoiding care charges. These rules enable the Local Authority to see-through any gift made by the person needing care if that gift is made with the actual or deemed intention of avoiding liability for care home fees. There are typically 6 ways to pay for your care costs. utting house in Trust to avoid care home fees – Can I do this? If you share your home with a spouse or partner then you will need to consider their circumstances too. Cut Care Home Costs. The simple answer to this is you cannot simply give your money away. If your income, including pension and annuities, exceeds £23,250 you will have to pay for the visits yourself. A consequence of this is that your property may then excluded from any financial assessment. Likewise, you may be thinking about inheritance tax planning. If you still retained the property in your sole name on death, a grant of probate would be required to deal with it. Q: I have a degenerative disease and am likely to need residential care within 10-15 years. You may hope for help with care home fees from your local authority, but this is means-tested and thresholds are very low. Find out about Saga customer benefits today. As long as either you or your wife were still living in the family home, the council would have to ignore the value of the home when working out your capital. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. Whilst on its own a Trust won’t always stop you avoiding care fees they can potentially be used to mitigate them. This means that they don’t make any provisions financially in case they do need to access domiciliary or residential care in the future. Unfortunately, the costs involved in moving into a There is a risk that this could be seen as a deprivation of assets. However, it won’t be counted if, say, your spouse or partner still lives there. Plan ahead and read about how you can pay for your funeral ahead of time. Many schemes will not apply once you move into a care home. Mrs Smith then remained in the home for 5 years until she passed away. You can click here to find a specialist that can help you see if it is the best option for you, Our writers, reviewers and content contributors, You cannot deliberately look to avoid care fees by gifting your property or, By purposely giving away your property, such as the family home, there is a risk that it is seen as deliberate deprivation of assets. Deprivation of assets means that you have deliberately reduced your overall assets to avoid paying for care provided by your local authority, including care home fees. The impact of which, years down the line, maybe that the value of these assets are not counted when assessing whether you need to meet your care fees. If you or your relative has Capital above the maximum threshold of £23,250 they may want to seriously consider effective legal ways to mitigate their liability to pay for their care costs in the future. Below this, you’ll contribute with the amount based on means-testing. Many of our clients ask us if there is a way to avoid paying care home fees, and fortunately with the right expert advice, Trusts can be set up to your advantage, to provide protection planning for your assets against paying any unforeseen care home fees in the future. The above saving thresholds include any savings and income, such as a pension. They’ll consider timing, alongside any motive or intention and the fee. Even though they approach old age with mobility issues or memory loss, they delay considering residential care altogether. Using Investment Income To Pay For Your Care, How Long Does It Take To Receive Your Inheritance, How Long Does Probate Take After Swearing Oath, How To Get Power of Attorney For An Elderly Parent With Dementia, Advantages & Disadvantages of Live in Care, Why Live in Care is better than a care home, 30 Important Questions About Dementia Answered, Alzheimer’s, Dementia and Managing your Finances, How to Spot if Someone With Dementia is Struggling With Their Hygiene, Spotting Signs of Abuse in People With Dementia, Choosing The Right Type of Cancer Care For You, 5 Things To Consider When Choosing Cancer Care, Tips To Help You To Stay Safe At Home For Longer, 15 Tips to a Healthy Diet for Older Adults, Everything You Need to Know About Life Insurance, Why you should speak to a financial advisor, Lightweight Vacuum Cleaners For The Elderly. First, the person’s capital is assessed. So, in the example of giving your family home to your children, not only could you end up with the double whammy of having to pay for your care and also not having a house to fund your care costs. Your local authority will pay care home fees of £177 a week direct to your care home if: you’re living in a residential care home, and; your local authority has assessed you as needing personal care. It is difficult to protect your home and avoid care fees unless your assets are below the threshold in England, Scotland, Wales and Northern Ireland. Provided by HUB Financial Solutions Limited. Therefore, mitigation rather than avoidance is the key. Careful planning can ensure you fund your care in the most efficient way possible and avoid paying any unnecessary costs. However, even in this instance, council-funded care may not meet your personal preferences or requirements. You want to ensure that whatever decision you make is right for you – which is why information and professional advice is key. The value of the assets that were given away is called ‘notional capital’. 2 July 2019 at 10:18PM edited 30 November -1 at 12:00AM in Deaths, Funerals & Probate. When/if it comes to you paying for your own care your local council will do a ‘means’ test to calculate how much you need to pay towards it yourself. The natural reaction of many people, when considering the future cost of When it comes to paying for care, it’s best to plan ahead. However, that said, there may be other very real reasons as to why you have to put your property into a trust. Like to advertise with us? This would, in all likelihood, be seen as a deprivation of your assets. Please read below. So, if for example, you gave your family home to your children, then they could be responsible for meeting your care fees. Jane is one of our primary content writers and specialises in elder care. You could have gifted your assets many years previously, and they can still count. UK care home fees, particularly accommodation fees, can be in the sum of over £1,500 per week. One option that many people look at is to use equity release to avoid paying care home fees. One told me her father put half his bungalow in her name so they couldn't touch that part. Generally, if you did the transfer a few months before going in to care them this is likely to be seen as depriving yourself of your assets. Many of the schemes are well presented and the advice given is utterly convincing, but the reality is that many such schemes are presented by salespeople more interested in their earning potential than the welfare of their Client. Again, this is just another type of deprivation of your assets. The difference can be as much as an extra 50%. You can find out more about each of these in our handy guides: However, this can also be a challenging prospect – as with so many options available, it can be difficult to know which choice to make. The decision to move into a care home isn’t an easy one to make. The most common approaches that we see, to give away ownership of your assets, without possibly breaking the rules of your council and local authority, are below. Read about what they are. Paying for care home fees can become a concern for many families, especially those who face losing their hard earned savings and investments to pay for nursing home care for elderly relatives. This means that they are not included, by your local authority, in any calculation to determine the value of your capital when assessing nursing home costs. However, it will only be available if you intend to receive care at home. Saga customers can enjoy exclusive offers from both Saga and our carefully chosen partners, entertaining and informative features, the chance to win fantastic prizes, and more. Paying care home fees and home care costs. Popular reasons for gifting assets, include: Stopping family disputes before they occur, Being proactive with dividing your assets early can stop any issues further down the line, and you can do it whilst you’re in full control, Wanting to see the recipient of the gift enjoy it whilst you can, You may want to help your children out with the purchase of a home or start a business, so you give them the money to do so, Recognising the support provided by an individual, During your lifetime there may have been an individual that was very supportive and has made a strong contribution to your lifestyle, and you want to thank them for that, Avoiding delays on distributing your estate on death. Therefore, we strongly recommend that you get financial advice. Benefits and pensions: Are you claiming everything you’re entitled to? Download our FREE guide to help answer some of the key questions around care. When disposal of assets is suspected, you will be means-tested using those funds by default – so you won’t gain anything or benefit from attempting to hide them. Can you just dispose of my assets to avoid paying nursing home costs before going into care? Out of curiosity, we recommend you try the calculator below and see how much money, tax-free, you could get out of your house. Women and men whose spouse or civil partner died before 2005 in the armed services may also be entitled to an additional Widows Pension or War Widowers pension. Most of us work very hard over the years to buy our own homes and build up our savings for our retirement and would like to leave a “little something” for our children and grandchildren after we are gone. Therefore, on its own, you cannot sell your house to avoid care fees unless you have some specific financial circumstances or if your family home has already been put in trust. Despite this knowledge, very few of us consider the financial implications until it is too late. Whilst it is not a hard and fast rule if the gift was made whilst you were in good health then it is harder for the local authority to link the giving away of the asset with the aim of avoiding care fees. This video explains how this type of trust works. Many people do look to put their house into a trust, so they can avoid care fees and pass their home on to their children. As long as all the actions you take are legal, a consequence may be that you are able to avoid care fees. According to Which, there are almost 400,000 people in the UK living in residential and nursing care homes. April 15th, 2018. The key to avoiding paying for care home fees and home care fees is to get financial advice as early as possible. As mentioned above, if you purposefully give away your house, money, wealth, capital or property with the aim of ensuring they are not counted towards a financial assessment for care costs this could be classed as deliberate deprivation of assets. 80 replies 5.4K views A friend says if I gift my home to my son and I survive it by 7 years, the local authority cannot take my home into account when assessing my means. – Interest in Possession Trusts – It’s a kind of trust fund set up to entitle the beneficiary to any income as soon as it is produced. Generally, if you did the transfer a few months before going in to care them this is likely to be seen as depriving yourself of your assets. Three examples are: – Life Interest Trusts – Allows you to allocate a beneficiary (usually yourself and/or a spouse /partner or  family members) who then has the legal right to receive income from or use a property named in the trust. How Can a Trust Help You Avoid Nursing Home Costs? Suddenly making lots of purchases in an uncharacteristic way, either as gifts or for yourself. Copyright © 2013 UK Care Guide. She has a degree in English language and literature from Manchester University and has been writing and reviewing products for a number of years. Deliberate attempts to reduce your money or assets could also be included. They are also known as ‘Property Trust wills’. Avoiding Care Home Fees. It could be tempting to give away or sell your house to relatives to avoid the fees to avoid paying the full cost of care. However, the decisions that Local Authorities make can also be challenged. You can also see a video on how equity release works on youtube. For a FREE consultation about your options you can call us on. You also cannot put your assets into a trust purely to avoid care home costs. These may not be in line with what you would have wanted. The task of looking after and maintaining your property may become difficult. Can you avoid care home fees? Therefore, it is possible to transfer money and give gifts to avoid care home fees. If the decision to shelter assets is made in a way that can be interpreted as a deliberate attempt to avoid care home fees, local authorities can challenge that decision. You can find details of who to contact below. If you were fit and healthy when you transferred your assets, and could not have imagined needing care and support at the time, then it may not count as deprivation of assets. Having worked so hard to save, it can seem unfair that the money you have put aside to protect your family and invest in their future be used up for causes not chosen by you. claim all of the benefits you are entitled to. Gambling away your money. A local authority might, for example, successfully argue that a trust created a few months before an elderly family member is due to move into a home is deliberate avoidance, known as deprivation of assets. The residential home fees amounted to £30,000 a year and the matrimonial home was sold to pay for this. This is a very complex area, and you do need to seek advice. Paying for Care Homes using Trust Funds So, any married couple can use a straightforward mirrored Will. Family – Unfortunately, family members fall out all the time. The deferred payment schemes offered by councils also differ geographically. putting a house in trust to avoid care home fees. “How to not sell your property when going in to care” is one of the most popular questions we get asked and people are keen to understand what their options are. £23,250 is the threshold below which local authorities in England will begin to subsidise or fully cover the cost of your care – depending on your circumstances. The longer the time period from you transferring the house to your children to you then going into There is more information on this below. If you are looking for ways to pay for long-term care, the Saga Care Funding Advice Service, provided by HUB Financial Solutions, can help you explore your options. But if you’re thinking of avoiding care home fees altogether, there are some things you need to know. However, if you need to move to a care home or nursing home, you must pay for the care fees yourself. It can be both emotional and stressful. That is partly because local authorities take a lot of rooms and get a discount. If you purposefully give away your house, money, wealth, capital or property with the aim of ensuring they are not counted towards a financial assessment for care costs this could be classed as deliberate deprivation of assets. Have a free consultation to discuss your circumstances and see what options you have: If you would like some help, please leave your details below and someone will be in touch. HOWEVER, there are some circumstances where it may be possible to give away your assets. It is possible to put your house into a Trust and assign your property to someone else, such as your children. However, there have to be other reasons as to why you put your property into a trust and not just because you don’t want to pay your care fees. However, there are routes you can take that stay on the right side of the law. A flat rate of £230 is currently proposed for these, which for many won’t meet the cost. If you do this, your property may still be assessed when your assets are calculated, There are legitimate reasons as to why you can gift your assets without them potentially being used as part of the calculation to see if you have to pay for your care fees. Therefore, it is only natural that people are looking at protecting their assets from nursing home fees and looking at how to avoid, and not sell, their property when going into care. Costs for home care average around £15 per hour. 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