If you don’t act NOW…
- Your savings and investments could be WIPED OUT.
- Your home may be sold to pay for your Long-Term Care Costs.
- Any income you receive would be assessed and used towards the cost of your care – often leaving little or nothing for personal needs.
- Your children and grandchildren could lose their entire inheritance.
When and how do I have to pay for care?
If you own more than the upper limit (currently a meagre £23,000 inclusive of all cash, savings, stocks and property), you will be expected to fund the FULL COST of your care. You are precluded from receiving any financial help from your local council until your entire savings (assets) have been reduced to that upper limit.
Once your assets drop to the upper limit, the local council will assess your ability to pay based upon capital and income. If your assets fall below the lower limit (£14,000), only your income will be figured into the equation. However, by that time, any significant assets, such as property, that you once had will be long gone.
How am I at risk?
You are most at risk of losing your home to care costs when you first enter care. If you own your home singly or with a spouse/partner who has predeceased you, the full capital value of your home will be assessed in determining your ability to pay. The same is true for any and all formerly jointly held assets, such as savings and investments.
How do I protect my home?
The simplest way to avoid having your home sold off to pay for care costs is to change the way your property is owned. Most properties are owned as a Joint Tenancy with another person; however, this is not the best way to own a property when considering long-term care costs or inheritance tax liabilities.
A better way to own property in order to secure it against future problems is to change ownership to Tenants in Common, where each partner owns a 50% share of the property. Upon death, ownership passes to a Trust, whose beneficiaries will be named as you and your partner see fit.
Only after the remaining partner goes into care will property and assets be assessed for care costs. At this point, the council will designate a value to the survivor’s interest in the property (at a price that could be reasonably obtained from a willing buyer). As the property could be legally occupied by any of the beneficiaries named in the Trust, it is unlikely a willing buyer could be found, and therefore, the person’s share value would be nil.
What about my other assets?
Assets such as cash, stocks and shares, bank and Building Society accounts, PEPS and ISAs will be considered liquid assets along with any income received, and will be assessed when determining fees for long-term care. Again, changing the way your assets are held and invested can help protect them against these costs.
For more information on how to protect your home and other assets from the financially crippling effects of long-term care costs, call 01752 401401 or 0333 240 1188 and speak with an experienced personal advisor today.
