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Therefore, on its own, you cannot sell your house to avoid care feesunlessyou have some specific financial circumstances or if your family home has already been put in trust. One option that many people look at is to use equity release to avoid paying care home fees. This allows you to take money out of your home and avoid having to pay care home fees. However, it is important to know that doing so in order to avoid paying the fees that you owe will be classed as deliberate deprivation of assets. Lifetime mortgages are the most popular, and these can be a great option for older people needing to fundhome care costsor residential care.
Remember, trusts are not 100 per cent guaranteed but offer an extra level of protection should you or a relative need to enter a care home. The local authority will ask about any previously owned assets, and take into account any reasons you’ve had to hand over assets or property to other people. They’ll consider timing, alongside any motive or intention and the fee. It could be tempting to give away or sell your house to relatives to avoid the fees to avoid paying the full cost of care.
How an asset-protection trust can help
And making sure it qualifies as long-term care protection can be even more complex. Our legal services are delivered by expert lawyers and professionals with a deep knowledge of the sectors and services in which they operate. If you have capital below the lower limit of £17,000 this capital will be ignored in calculating how much you have to contribute to the cost of your care and you will be funded by the local authority.
Making the right decision at the right time can significantly increase the likelihood of you being able to retain your property, leave an inheritance and keep some disposable income behind for whatever you wish. “How to not sell your property when going in to care” is one of the most popular questions we get asked and people are keen to understand what their options are. You will, therefore, need to think about how you invest your savings to ensure they work as hard as possible for you. This means that they don’t make any provisions financially in case they do need to access domiciliary or residential care in the future. "Anyone who owns their own home is usually exempt, and families are often forced to sell the home to cover the cost of care. This includes savings, income, and your property may be counted as capital after 12 weeks if you move into a care home on a long-term basis.
Services
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.
Even for the fortunate few with a bigger nest egg, a stint in a long-term care facility could take a major bite out of assets they had planned to leave to their family. You can give your children large financial gifts, as long as it is clear that you are not doing so to avoid care fees. There are no particular limits to this, but would depend on your age, health and the prospect of you needing care in the near future at the time of the gift.
What is deliberate deprivation of assets?
This requires specific planning and specialist advice from a will writing expert. If your retirement plan doesn’t include a strategy to cover the possibility of long-term care needs, it’s incomplete. Talk to your financial adviser and an attorney about using a trust for asset protection and what it could do to reduce the risk in your plan. It’s also about protecting that money from retirement risks, such as taxes and long-term care costs, and — if it’s important to you — being able to leave something behind for your loved ones. Whilst the surviving partner continues to reside in the property there are no issues, but once the survivor goes into care is when property and assets will be assessed for care costs.
It is better to plan in advance to prevent your property being sold to pay for your care home fees in the future, which could leave your children or family with little to no inheritance. Even if your savings and assets are above the limit, you still may qualify for some services and assistance. This depends on your medical needs as well as the resources available to your local authority.
Avoiding Care Home Fees in December 2022
Plus, whatever they leave behind someday will be more tax-efficient for their kids. Assets such as Cash, Stocks and Shares, Bank and Building Society accounts, PEPS and ISAs etc will be determined as liquid assets and in addition to any income received will be assessed for Care. Changing the way your assets are both held and invested will ensure that they are not assessed for care costs. If you have less than the upper savings limit, or when your savings drop to this limit, the local council will then assess your ability to pay based on both your capital and income.
So, while in reality Mark now only has £20,300 in savings, the local authority treat him as though he still has £29,300. This will mean that rather than being left with a minimum of £14,250 after paying for care, the local authority only leave mark with £5,250. People sometimes think about giving away some of their savings, income or property to reduce the amount they’ll need to pay towards their care.
Under joint tenancy, when you die the legal ownership of the property will automatically pass to to the other joint owner. The good news is that it is possible to protect some of your estate by using certain trust structures in your will. Those kinds of costs can strike a mighty blow to even the strongest budget. As you can see, there are many considerations you should be aware of when planning for the future and we would always encourage taking advice from a solicitor beforehand. Our lawyers provide legal expertise to clients near and far from our offices located across the UK and in Brussels. These are also products which can give a family a huge amount of control over what goes on during the care process, and how it is to be paid for.
It is possible to combine a deferred payment scheme with a plan to rent out your property. If you jointly own your home, you can put the ownership of it into ‘Tenants in Common’ rather than ‘Joint Ownership’. If the person who doesn’t need care were to pass away, their share of the house could be passed on to another family member. Otherwise, their share will go to the person needing care, and could then be used to pay for care.
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