MONEY MATTERS: Will your assets be swallowed up by care home fees?

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Men aged 65 today have a seven in ten chance of needing care before they die and women have nearly a nine in ten chance. The average cost of care paid is £30,000, with some paying over £100,000.

Current rules provide for extremely limited situations where care and accommodation might be free, but generally a financial assessment will take place. For those with assessable assets in excess of £23,250, the full care home fees are payable. Those with assessable assets in excess of £14,250 will be expected to make a contribution. Assessable assets will almost always include the value of a property and cash, although there are some exceptions. For example, a mobile home should be disregarded in a financial assessment, as should investments known as Investment Bonds.

There are ways to protect assets legally, such as a couple signing carefully drafted wills to protect their property. But there are also a lot of unregulated companies out there offering schemes which “guarantee” to protect a property, simply by giving it away. Unfortunately, the reality is somewhat different.

For those who do not have time on their side because they are about to go in, or are already in a care home, planning in advance is not an option, but action can still be taken. For example, the sale proceeds of a property can be invested to provide an income, or used to purchase an Immediate Care Fees plan. This is an insurance policy to cover the difference between the care home resident’s income and the care home fees.

Whilst the Government will shortly be setting out its plans to meet the growing cost of care, it is important to note that its definition of “care” does not include accommodation costs. Accommodation costs represent perhaps one half of the weekly charge in a care home, and so clearly any Government assistance with the cost of “care” is still going to leave a large bill to pay.

Expert legal advice and independent financial advice should be sought sooner rather than later in order to protect an inheritance for the next generation.