Planning for the future is often something that we put to the back of our minds because we don’t want to face the realities that come with getting older. However, the importance of thinking about later-life planning has never been more widely reported in the press, not least because the cost of financing our care is continually on the rise.
It is a sad truth that most of us will need some sort of help in the future, albeit that our needs will vary. Some of us may choose to receive care in our own homes for as long as possible, whilst others may prefer the security of moving into a residential care home. Whichever the outcome, the costs of care are high, with the average residential care facility charging more than £800 per week (and this is even higher in London and the Southeast).
How can your care be funded?
In summary, in England, if your assets exceed a threshold of £23,250, you would need to pay for your care in full. If your assets fall between £14,250 and £23,250 then you will be eligible for some funding from the Local Authority, but you will be expected to contribute towards some of the fees from your savings. It is only if your assets fall below the lower threshold that the Local Authority will contribute in full to your care costs, although usually you will still be expected to sacrifice part of your income as a contribution.
You should note that if you have a disability or a medical condition, you may qualify for NHS continuing healthcare funding, which is not means tested.
Can I safeguard my assets from forming part of the assessment?
Most of our clients are concerned about having to sell their property to finance care. The good news is that the value of your property will be disregarded when your finances are assessed if your property is still occupied by:
- Your partner;
- A relative over the age of 60;
- A relative who is incapacitated;
- Your child under the age of 18 who you maintain; or
- Your estranged/divorced partner who is a single parent.
Therefore, if you are married, for example, and one of you were to move into residential care, the whole value of the property will be ignored for the purposes of your financial assessment whilst the other spouse is alive and remains living in the property.
However what happens once one of you has died? If the survivor of you inherits the whole of the deceased’s estate (including his/her share in the property), there is every chance that the whole value of the property is taken into account and it may be that there is nothing left for your family when you have both passed away; something that our clients are increasingly concerned about.
We would therefore also recommend considering including trust provisions within your Wills if you are a married couple, so as to ensure that following the death of one of you, the value of the deceased’s share in the property is disregarded if the survivor later requires care. This would involve ensuring that you own your property together as tenants in common, and passing your share in the property into a life interest trust upon the first death. By doing this, you can ensure that at least half the value of the property will be preserved for your loved ones. This is both sensible from a care-fee planning perspective and is also tax-efficient for inheritance tax purposes.
Other considerations
There are many other considerations when planning for future care, and we would recommend contacting us at Nockolds for further advice should you have any concerns whatsoever.
For more information and to find out how we can help you, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.