The political publicity machine has proudly boasted that "no one during their own lifetime will be forced into selling their home to pay for care". But is there more to this than meets the eye?
If a home owner requires long term care, the local authority should offer a deferred payment option to the family meaning that people should not have to sell their home in their lifetime to pay for their care bills. Eligibility criteria for these agreements are;
- You are receiving care in a care home or are going to move into one soon
- You own your own home (unless your partner or certain others live there)
- Your have savings and investment of less than £23,250 (not including the value of your home or your pension pot)
Under a deferred option, the local authority pays part of the cost of the care on an individuals behalf and this amount is then registered against the family home as a legal charge or debt. They can also charge interest on the amount that is owed to them and the total debt is repaid out of your estate following death.
This means that ultimately, the home is sold to pay for care fees.
There were proposals to introduce a cap on care fees during 2016 so that no one will have to pay more than £72,000 towards the cost of their eligible care and support needs during lifetime. However, this has now been delayed until 2020. It is estimated that 1 in 10 people who find themselves in the care system end up contributing over £100,000 to the cost of their care.
The reality is that the care system is one that is under extreme financial pressure for a variety of reasons. Families should not be fearful of contributing to the cost of care but consider how much control they wish to exert in managing the assets they have worked so hard to build. With an increase in the prevalence of long term conditions such as dementia, the option to contribute to care costs from perhaps the rental income from the family home may be a mechanism by which a happy medium may be reached.
The important point to remember is that there are choices.
Want to know more?
If you want to support your clients to make key decisions in relation to their future legacy, our unique 1 day Estate Planning training has been developed with professionals such as yourself in mind and you can expect to cover aspects such as;
- The Law of Succession
- Assessing Mental Capacity
- Will Trusts & Lifetime Trusts
- Lasting Powers of Attorney
- Funeral Planning
- Estate Administration & Probate
These fundamentals will quip you with the desire to support your clients in getting their affairs in order in partnership with Beneficial Trust & Will Co.
Our next scheduled training date is
Wednesday 30th March
With places filling fast find out more today and build your estate planning business.
We look forward to working with you
The BTWC Team