Can You Avoid Care Home Fees?
Author: Brian Fraser
A recent BBC article has highlighted the importance of seeking legal advice when taking steps to mitigate the costs of Nursing Home Care. It concerns Don Steer, who had been diagnosed with terminal cancer. Due to the value of his savings and owning his home outright with his wife, he did not qualify for council support in relation to costs of care. Concerned they may have to sell the house to pay for care home fees, Mr & Mrs Steer placed their house into trust. Mr Steer passed away before needing to pay care home fees, but should they have been required it is likely that the transfer of the house into trust would have been ineffective. This is because a significant factor in placing the house in trust was to reduce their estate for capital assessment. If the local authority determine this to be deliberate deprivation of assets, they can take action to recover charges.
Clients often wish to take steps to prevent their assets being used in paying for the cost of care. However, it is important that full legal advice is sought before transferring away assets, as the options available will always depend on the individual circumstances. In particular, where assets have been transferred and the transfer is determined to be solely for the purposes of avoiding care fees, the local authority can either charge the individual as if the asset was still their property, or seek to recover costs from the person in possession of the asset.
Careful consideration must be given not only as to whether a transfer will have the desired effect in reducing liability for care home fees, but also the risks involved in such a transfer. It has become increasingly common for clients to consider gifting assets to their children during their lifetime, in particular their family home, to avoid this being taken into consideration when assessing capital. However, clients should always seek advice on the potential risks of such a gift. Complications can occur if, for example, a child who is gifted an asset then goes through a divorce or is declared bankrupt.
If you are looking to plan for the future, contact our private client team who can advise you on the range of options available.