Long Term Care Planning – Are you concerned about this for either yourself or a loved one?
We tend not to think about how to pay for long term care until one of our relatives has to go into a care home. It is only then that the impact of providing this type of care becomes clear. The weekly costs can really start to mount up, particularly if 24-hour residential support needs to be on hand. Therefore, it is not surprising that most people do not have sufficient income to meet these costs.
Many people will need to draw on their savings to meet care payments. There are insurance products available that may help. By paying either a monthly or a single premium, you can add to the amount currently available through state benefits to fund the cost of such care. This means having to deplete less of your assets to meet the cost, thereby leaving more of your estate for your beneficiaries when you die. Such policies are expensive.
How much does a care home cost?
If you have more than £23,250 in capital, it’s likely that you will be asked to fund the care home yourself. Those with assets between £14,250 and £23,250 will face an assessment as if they have an income. In the UK, for every £250 over £14,250, you are assessed as if you receive £1 per week of income. For those with £14,250 or less, care costs will be covered by the Local Authority, but all income must be contributed minus £24.90 per week which is classed as personal expenses.
What about shared assets?
In general, it is prudent to separate or split shared assets when care may be needed. Usually, co-owners are treated as owning shared assets jointly.
Will I need to sell my home?
This is the big question. Usually, the house is disregarded while your wife or husband is still living there. It may also be disregarded if you have an adult child aged over 65 or a disabled child of any age living with you. The means assessment is carried out by the local authority who do have a discretion to disregard assets where it is fair to do so. They may also be able to set up a deferred payment agreement –like a mortgage so the bills are paid when the house is sold in future.
What about giving away assets?
Giving assets before claiming help with care will usually be subject to scrutiny and challenge. It may be treated as a deliberate deprivation which the local authority can seek to reverse with court action. this would be a very difficult situation. however, taking early action to preserve assets well in advance of any entry into care may be possible.
Who will pay for long term care?
If you require residential care your local authority has a duty to assess your needs. They will assess your means to see if you qualify for assistance. If you do not want to be assessed then you will pay the full cost of your case.
If your resources are above the current capital limit of £23,250 you will have to fund your care yourself from your income or savings. When your resources reduce towards the capital limit you can request a reassessment and the council will pay a greater share of the cost.
If you own your own home you may need to sell it to fund your care or you can agree to place a charge on your home so the cost is paid at a later date. With care fees running at around £4000 a month this is a controversial area which the government has committed to reform.
What are my options for long term care planning?
It is usually necessary to look at the bigger picture of family needs, assets, wills and property ownership to work out possible solutions and identify pitfalls.
How can long term care planning solicitors help me?
We can take a full picture of your family and financial circumstances and set out options appropriate for you and your needs.
Our information on asset preservation may also be of use when researching this complex subject area. If you are looking for further help with life planning, our team can help:
Our specialist team of solicitors in Newcastle upon Tyne and South Shields can offer holistic advice concerning all issues around long term care planning.
We know no two situations are the same so we offer personalised solutions as to what is best for you and your family. Contact our team on 0191 232 9547 for further guidance.