Long Term Care/Care Funding Issues

When most people think of long term care, they think of a care home.  There are many different options available however, from getting help in your own home with basic tasks, to being cared for in a residential or nursing home.  It is essential, therefore, that you or your family try to plan ahead before care is needed.  This is particularly important if you or your loved one are in hospital and will need care before being discharged.  Families often find that more than one type of care is required as a person’s needs change.  Ideally, therefore, moves from one service to another should be avoided if at all possible.  Arranging and funding long term care is very complicated.

For those helping loved ones find a care home, there are a number of considerations to be aware of.  Whether the care is being self funded or the local authority is meeting the care costs you should still have a choice of care homes.  This, however, depends upon the circumstances, particularly if the Local Authority is funding the costs.  When a care home placement is proposed it is essential that you feel confident that the home will provide the care needed, including meeting the necessary medical needs to ensuring it provides a wide range of recreational activities.  There are complex legal contracts to be understood and signed, including the issue of third party top-ups.  We can offer guidance and advice to ensure that you understand the options available and in particular the financial commitment you are making.   It is important that you obtain advice before documentation is completed.  It is also important that you take advice from a suitably qualified specialist independent financial advisor on these issues.

One of the biggest worries for people is funding the cost of residential care when they are no longer able to live independently. Many are also concerned that the assets that they have earned during their lifetime will be used to fund this care and so will not pass to their intended beneficiaries. You cannot try to avoid nursing home fees by deliberately transferring your assets but there are measures that can be taken to plan for this eventuality.

Most people’s main asset is their home and it will be considered by the local council as part of their financial assessment.  However, your home will not be considered as part of the financial assessment if your partner or any other dependants still reside there. The Council may exclude the value of your home if it is where your carer lives. However, if your home is included as part of the financial assessment, then it could be used to fund your residential care.

However, there are ways of protecting your property from being included as part of any financial assessment through the creation of a Trust. The Trust operates by transferring your share in the residential property into a Trust through your Will at the time of your death. As the share of the property has been placed into a Trust it does not form part of your surviving spouse’s estate for the purpose of the financial assessment. The Trust will allow your spouse to continue to live in the property until their death when the Trust will be dissolved and pass to the beneficiaries that you have appointed.

However, please note that the Trust only comes into operation after your death and will not protect the property from being included in the financial assessment if both you and your spouse require residential care.