Using Wills to Avoid Care Home Fees
Care home comparison website Lottie found that 91% of UK care seekers believe that care homes are expensive, and up to 97% of residents interviewed believe that their homes charge disproportionately large fees on top.
With results like these, it shows that you need every edge you can get to save as much money as possible for yourself and for your loved ones if you’re planning to move into one of these facilities. This is why many people are wondering whether it’s possible to use wills to avoid care home fees.
This blog will discuss who has to pay for care home fees, how much the costs are, the best ways to avoid care home fees, what is deprivation of assets, and more.
Who Has to Pay for Care Home Fees?
Traditionally, the person living in the care home is the one responsible for paying their care home fees. However, in the UK, you are only required to pay the fees in full if the total sum of your personal assets exceeds the national threshold.
This threshold is different for those living in England and Northern Ireland than it is for anybody in Wales or Scotland, adding further complications to an already confusing situation. The thresholds per nation of the United Kingdom are:
- England: £23,250
- Northern Ireland: £23,250
- Wales: £24,000
- Scotland: £27,250
If the value of your personal assets (including the value of your property, money, possessions, etc.) exceeds the threshold for your area, then you will be classified as a ‘self-funder’, meaning you will be expected to pay your care home fees in full out of your income/savings.
It may still be possible for ‘self-funders’ to get some help with paying their care home fees. This can include personal independence payments, carers allowances, and more.
If your assets do not exceed this threshold, it is likely that you will be eligible for some form of support from your local authority or council. It is also possible for a friend or family member to pay a ‘top-up fee’ towards the cost of your preferred home if it were out of your budget.
In certain circumstances, it may also be possible to have your care home fees paid for by the NHS through their NHS Continuing Healthcare Funding scheme. If you are unsure about what you are expected to pay, or if you feel that you will require assistance with your payments, it is recommended that you contact a specialist.
How Much Are Care Home Fees in the UK?
While care home fees are seen as high, the price actually depends on the location and the type of home in question. For example, a nursing home in London offering 24 hour care and support from specialist medically trained staff will cost more than a basic home with basic support and staff training in the heart of Salford.
There are a variety of homes available that offer different levels of care, for different levels of price. This includes:
- Home-based care: A nurse will visit you in your home
- Care homes: Provide patients with personal care (washing, dressing, medication, etc.) as well as offering regular social activities.
- Nursing homes: This type of home will provide similar personal care to care homes, while also offering assistance from qualified nurses.
- Care homes with dementia care: A care home designed to protect and ensure patients with dementia feel as comfortable as possible.
- Dual registered homes: Dual registered homes can provide both personal and nursing care at the same time, under one roof.
Within each of these different levels, there are also differing qualities of home, with some places offering more luxurious levels of care with nicer rooms, more amenities, more leisure options, etc. These care homes will undoubtedly cost more than those without.
Healthcare business intelligence firm Laing & Buisson conducted a study into the average care home fees in the UK. They found that fees ranged from around £27,000 to £39,000 per year for care homes, while this figure would rise to £35,000 to £55,000 per annum if nursing care is required.
How to Protect Against Care Home Fees
One of the biggest fears of anybody entering into care is the impact the care home fees can have on their assets. The most effective method of protecting against care home fees is to create a trust in your will that ensures your home is protected against these fees, and your loved ones inheritances will not be impacted as severely.
This can be particularly helpful advice for married couples cohabiting a property. In this method of trust you can make sure that each spouse’s half of the home will go to surviving children upon their death. In this circumstance, the trust can even state that the surviving spouse may remain in the property for the remainder of their life, or until they are no longer able.
This would mean that the beneficiary of the home would not take actual physical possession of the property until the situation is right. Therefore, when the first parent dies the survivor remains in the property, but should they ever need to enter care, only half of the property would be deemed to belong to them and only half of the total value of the home would factor in when assessing the care home fees.
In order to alter your will in this way, the couple in question would need to adjust the ownership of their property from ‘joint ownership’, instead setting it out as ‘tenants in common’. The difference being that joint ownership means that both parties own the property equally and upon one party’s death, the entire asset automatically goes to the other.
However, tenants in common mean that each party independently owns half of the property each — meaning that they can opt to do whatever they wish with their half.
What is Deprivation of Assets?
Deprivation of assets describes the action of an individual intentionally decreasing the sum of their assets in an attempt to reduce their future care home fees. The most common method of deprivation of assets is to give money or assets to loved ones as a gift.
Other common methods of deprivation of assets includes:
- Selling assets on for lower than true market value
- Extravagant spending against normal amounts
- Transferring title deeds of your property to somebody else
- Buying pricey items that would not be considered a personal possession
If it is deemed that somebody has deliberately deprived themselves of assets in any of the above ways or any other method, their local authority may still opt to include the value of these assets when determining care home fees. This is decided if the assets were passed to the second party recent enough that it be deemed unlawful, or if there are alternative justifications for giving these assets away.
How to Avoid Deprivation of Assets
Ultimately, the best method to avoid deprivation of assets is to plan ahead. If you reduce your assets by giving gifts to loved ones far enough in advance of conceivably needing care and support, the council will be unable to charge you with anything.
Reducing your assets while still fully healthy and independent will limit the potential for your actions to be deemed deprivation of assets.
The rules of deprivation of assets can be complicated. What constitutes as lawful or not can be difficult to grasp, particularly for those with little to no experience in the field.
If you are in the position where you are considering ways of avoiding care home fees but do not wish to fall foul of deprivation of asset rules — or you have already done so — it is recommended that you contact a legal specialist to learn what the best next steps are.
How Just Wills and Legal Service can Help
The last thing you want if you ever need to enter into care is for the care home fees to have a lasting impact on your loved ones. Your inheritance is — in many ways — a legacy that you leave behind for your family who can choose to spend it however they wish, to remember you by.
Care home fees can cut a huge chunk out of what you are able to leave behind for your close family and friends once you are gone. This is particularly true if your estate contains a beloved family home.
However, when it comes to estate planning, you never need to operate alone. At Just Wills and Legal Services we have years of experience and training in assisting individuals in preparing their estate against all manner of possibilities — including entering into care.
Get in touch with a member of our team today to find out more about what we can do for you and to discuss your options.
Get in touch
Book your free 20 minute consultation with an expert either by video or phone call now