Navigating the future: How care fee planning can aid wealth preservation

The need to move into care in later life is unfortunately faced by many.  The expense of care is costly and there is the worry that it uses up a large portion of your estate.  It is unlawful to deliberately deprive a local authority of funds, however there are legitimate ways to protect your wealth for the future.  In this post we look at how to safe-guard your hard-earned assets by planning for future care, ensuring they can be passed on to your beneficiaries when the time comes.  We look at planning for care home fees and how best to ensure wealth preservation.

The cost of residential care will vary depending upon where you live.  The usual cost is in excess of £800 per week and care in a nursing home is considerably more expensive.  Any savings or investments you have can be used up very quickly, depleting the total value of your estate.

Care Fees: Asset Levels Breakdown

Your local authority will only fund your care requirements if your savings and assets are below a certain level. 

  • High – Those with more than £23,250 are classed as self-funders and are expected to pay for care costs themselves.
  • Moderate – If you have between £14,250 and £23,250 you are expected to contribute toward your care costs.
  • Low – If your assets are below £14,250 your care is fully funded by the local authority

If a person’s needs are primarily health-based due to medical requirements, they may qualify for NHS continuing health care or CHC.  In this instance, the NHS pays for your care home place.

Deliberate deprivation of assets

The deliberate deprivation of assets refers to any actions taken by an individual to intentionally reduce their wealth or assets to meet specific financial eligibility criteria.  In this case, reducing the amount they have in assets to avoid contributing towards care costs.  This process is unlawful and can have legal and ethical consequences.  If assets are seen to be given away with the intention of avoiding paying for care, the local authority can take action to recover them.  This can happen even if assets were transferred many years before the need for care.  There is no time limit to the deliberate deprivation of assets.

Safeguarding assets from potential care home fees

It is possible to protect your assets from being used to fund your spouse or partner’s care home costs.  Taking a proactive approach and implementing the correct estate planning can lead to long-term wealth preservation and peace of mind.

You can use your Will in order to plan for the future.  Leaving your spouse or partner a life interest in your assets, ensures they are provided for during their lifetime.  Placing assets into a trust means the local authority is unable to include them in their financial assessment.  Consequently, your spouse or partner then has the benefit of these assets for as long as they need.

Setting up a life interest trust in this way means that once your shared home is eventually sold, your portion of the property passes under the terms of your Will.  For example, to your named beneficiaries, such as your children.

Alternatively, you can leave a property or share in a property directly to your children.  Granting occupation rights to your spouse or partner so they can live there for as long as they wish to.

Always seek advice from a professional expert in estate planning.  It is critical that any planning you do for the future is right for your particular circumstances and adequate to protect your loved ones.

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