LONG TERM CARE
Let’s see how we mitigate Long Term Care costs
Protection from unnecessary costs
Here is a short guide to the process of potentially going into care.
Many are not aware of the process which includes how you are assessed along with what steps – and importantly costs – are involved.
We also cover how best to protect yourself from unnecessary costs whilst getting the care you or a loved one needs.
As with anything, planning ahead as early as possible is always beneficial and that is where Hamilton Legacy can help.
LONG TERM CARE GUIDE
When it becomes clear that you or a loved one will require further support and need to go into care, various assessments must be carried out by social services.
- Firstly, a general care assessment is required, secondly a Continuing Healthcare (CHC) assessment is carried out and thirdly, and only after the first two assessments, a financial assessment is made. A Continuing Healthcare assessment is to ascertain whether your needs are ‘medical needs’. If so, they will be funded either fully or partially by the NHS rather than by you or your local authority.
- As part of the financial assessment, your income (including state pension, work pension, private pension, investment income, rental income) and half of any joint income is ascertained, as this will be used towards funding your care. Your capital assets are also assessed along with your share of any joint capital assets you may hold with your spouse / partner / family member or friend. You do not need to declare any of the assets owned individually by your spouse / partner as they cannot be used for your care.
- If there is a shortfall in your income compared to the cost of the care home fees, your capital is also taken into consideration.
- Once your income and capital have been established, the income will be taken to fund your care although often only half of your occupational income is taken if you have a spouse / partner at home. This is to recognise their potential need for half of your income.
- When deciding how much of your capital will be used to top up the income you are already providing, if your capital exceeds £23,250, you must pay full fees. (This is called ‘self-funding’).
- If your capital is between £23,250 and £14,250 then you will pay a certain percentage of every pound towards your care and this is called a ‘tariff income’ (£1 for every £250 of capital).
- If you have capital assets of less than £14,250, you will not need to make any capital contributions, but your income is still used to pay for your care. Your local council will pay the remaining cost of your care.
- Your house is part of your capital assets and will be assessed for your care under certain circumstances. It cannot be assessed as part of your financial assessment if there is someone still living in the house when you go into care. However, that person can only be your spouse / partner / a person aged 60 or over or under 18.
Protecting your assets from care costs
Many people have a legitimate concern that they may lose their assets to pay for their care costs rather than being able to hand them down to their family. It is one of the big concerns for us all.
If that concern leads to any action at a time in life where you have a foreseeable need for care, then that action could be seen by your council as ‘Deliberate Deprivation’. This includes giving money away, putting it into Trust, unusual levels of spending or transferring it into products sheltered from care cost assessments.
However, there are many legitimate routes you can take that will ensure that your family receive your assets rather than them being assessed for your care-fee funding, as long as you have no foreseeable need for care.
How can we help?
Advice concerning care fees’ protection is a specialised area. It will need open and full disclosure of what your assets are, including capital and income, how your assets are owned and what you want to achieve.
We know from years of experience that every situation and every estate is different, so the advice will be different and tailored for everyone – one size does not fit all.
We offer a range of Trusts that can protect your assets, including your house and your other capital. These can vary from Trusts in your Will that only take effect at your death to those used during your lifetime. We will discuss all options with you to craft that tailored solution to ringfence your assets.
“Many people have a legitimate fear of losing their assets to long-term care costs, but you can plan ahead to protect your assets.”
Why you might wish to consider a House Trust
Tonya has a lovely bungalow from which she hopes she will never have to move as she has future-proofed it as much as she can. She wants it to pass to her grandchildren as her children are both very comfortably off and it is “tricky for the youngsters nowadays”.
She is particularly proud of her garden. It is her pride and joy and she spends as much time as she can in it daily, come rain or shine.
She has a modest income which she spends on days out and meals with her friends as well as a couple of coach holidays each year. She has a small amount of savings of around £15k which she likes to keep just in case of emergencies.
We would discuss the options with Tonya, particularly regarding putting her house in Trust for her grandchildren.
Frequently Asked Questions
If I put my house in Trust, is it safe after 7 years?
This is a very common misconception and commonly confused with other laws. There is no finite time as to how far back a local authority can go to investigate whether you have deliberately deprived yourself of an asset when you had a foreseeable need for care. However, if you were to enter into care, any gifting, excess spending or use of Trusts in the six months prior which meant that you were now reliant on local authority funding would be examined. Seven years has nothing to do with care costs and is for inheritance tax purposes only.
Could my Trustees remove me from my house if it is in Trust?
Not with our Trusts! Whether you put your house into a Trust in your lifetime or you use a Will Trust so it is protected when you die, the Trust will always ensure you or your spouse / partner are secure and have the right to live in that property or indeed move to another property, even a rental property, should you or your spouse / partner wish.
What Happens Now?
“It’s never easy talking about death or possible illness or infirmity, but we gently guide you through this – making sure those you love get what you want them to have.”
Feel free to contact us for an in-depth discussion about your options, our fees, the process or anything else. Just pick up the phone or send us an email. We know from previous client experience that you will be pleased you did.