Table of Content
Hiding money from social services to avoid paying nursing fees is also against the rules of the law. Local government has been cracking down on those intentionally usingTrusts to gifttheir property to their family and avoid fees. It is also worth knowing that you can usually rent out the property in addition to using a deferred payment scheme when paying for care homes. You could then put that extra income towards affording the care place that you would like most.
We always suggest taking legal advice before you do this, to check it’s right for you. The good news for individuals requiring care and their families is that there are plenty of funding options on the table – provided the financial aspect of care is considered early enough. The sooner provisions are made, the more flexible options you have. The value of the assets that were given away is called ‘notional capital’. Essentially a trust is something that is legally recognised and can be enforced by a court of law.
How to plan for care home fees in Scotland
If your assets are over the threshold, you will be classed as a self-funder. You will then be expected to pay your charges in full from your own income, savings account, or property’s value. 02 August 2021 Discretionary trusts in wills explained A discretionary trust is when money or other assets are held in a trust and your trustees decide which people become beneficiaries and when. In contrast, the surrender value of an investment bond without life assurance is taken into account.
Home care fees can be far higher outside these times, including at weekends. And when it comes to bank holidays, some agencies will charge almost double the standard hourly rate. With offices in Northville and Brighton, we invite you to contact our law office if you have any questions about Medicaid trusts or other forms of asset protection. The Omnibus Budget Reconciliation Act of 1993 gives state Medicaid officials the right to recoup any funds spent on your nursing home care from your estate after your death. Thus, your heirs could stand to lose any assets you did not properly shelter before entering the nursing home. You may have established a living trust, but it's not functional until you transfer ownership of your assets to it.
Read about the different ways to pay for your care costs
Many care homes have wait lists for spaces, and you may not be able to move in right away. Use the NHS directory to find a care home that provides the services you need, and tour the facilities at least once before making your final choice. Equity release schemes typically charge a set-up fee, which may be several thousand pounds. If you die before paying back the loan, all outstanding money owed must be paid within 90 days of your death. Make sure you won't be leaving your family in dire financial circumstances if this happens. If you have your local authority conduct the needs assessment, you'll be asked a few questions to determine your basic situation.
From that day on it will be taken into account if residential care becomes necessary, and it’s value can be entirely swallowed up by care costs. It will ask about previously-owned assets, not just those that are owned currently. Deliberate deprivation of assets is when a local authority deems that a person has deliberately disposed of assets to increase their eligibility for social care funding. Given this, it might seem that the perfect solution is to give the assets you have accumulated for your family to them now, rather than as an inheritance later. The assets go to the people you intend them to have, and they no longer belong to you to be counted for Medicaid eligibility.
UK Care Guide - A trusted resource, as seen on
This means that if your surviving spouse is means tested, the assets held in the trust won't be counted as part of their estate. Their joint estate was worth approximately £250,000, primarily made up of their home worth £240,000 and £10,000 of savings. They wanted to plan ahead so they put in place standard mirror wills. Their wills left everything to the other when the first died and then, when the surviving spouse died, everything would go to their children in equal shares. Without this planning, a couple's assets could be significantly depleted by care fees. An asset-protection trust is one strategy to consider to help preserve your family's legacy, but it must be done thoughtfully ...
The local authority will consider it "deliberate deprivation" and you will not meet the test for assistance with care fees. If your savings and assets are below the means threshold, the local authority will pay for care for you. The care you receive will be based on the outcome of your needs assessment. It can be a shock to many people when they find out they may have topay over £100,000 for their carehome costs.
My mom wasn't wealthy, but she was informed, and she had all the paperwork waiting for me. Whilst you cannot avoid paying care fees, by seeking professional help in advance, you can take steps to protect your assets, particularly your family home. You have to pay for your own care costs if the valuation of your personal assets exceeds the national threshold. However, an equity release may drastically reduce the amount of inheritance you leave for family. Make sure anyone potentially affected by your decisions understands the implications of using these methods to cover your care fees.

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. The most popular way to avoid selling your house to pay for your care is to use equity release. This allows you to take money out of your house and use that to fund your care. If you live in England or Northern Ireland and have assets or savings worth more than £23,250 (£50,000 in Wales and £28,750 in Scotland), you’ll have to pay for your care home fees. Below this, you’ll contribute with the amount based on means-testing. There is no limit to how far back the local authority can look to work our whether any care home fee avoidance has taken place.
If you move an asset to someone else to avoid it being included in your financial assessment, the local authority can require them to pay for your care up to the value of that asset. If they believe you’ve reduced your assets to avoid the cost of care, the local authority has a few options. If you’re seeking help to pay for care, the council will look into your finances and check you haven’t tried to give money or property away. Therefore, it is possible to transfer money and give gifts to avoid care home fees. However, do get financial advice before you make any gifts so that you are aware of any potential consequences.
"Continuing Care assessments are based on your parent’s healthcare needs and include things like how mobile or immobile they are, the severity of their condition and the complexity of their medication. Unfortunately, there isn’t an obvious way, aside from financial planning ahead of old age to give yourself enough funds to meet the cost. I am a keen reader and writer and have been helping to write and produce the legal content for the site since the launch. I studied for a law degree at Manchester University and I use that theoretical experience, as well as my practical experience as a solicitor, to help produce legal content which I hope you find helpful.
Mom qualified after I pre-paid funeral costs to reduce her assets, but the finances are much more complicated when you have wealth. And, considering the high monthly cost of a semi-private nursing home, you can see how quickly your savings will disappear should you need nursing home care. This type of trust is similar to a Protective Property Trust as one half of the property is ring-fenced after the first partner’s death so that it will be protected from care fees. You must have legitimate reasons for setting up the Trust, however, and not simply trying to avoid care home fees. It is therefore important that you speak to a legal specialist to ensure the trust is set up correctly.

No comments:
Post a Comment