Q&A - Can we avoid paying care home fees?

04/04/2010

Q: My mother needs residential care but we are worried about the cost depleting her assets, including her £475,000 home which passed to her when my Father died 18 months ago.  What can we do?

A: Firstly, ask to see a copy of your mother's Care Needs Assessment. If her predominant need is for nursing care the NHS must provide it free of charge, irrespective of whether care is provided at home, in a private nursing home, or in hospital. If your Mother lives in Wales and her predominant need is for personal care, she will have to contribute to its cost if her capital exceeds £22,000 and/or her weekly income exceeds £22.

Care funding is extremely complex and expert advice is needed for each individual case. There is a common but incorrect belief that giving away capital more than seven years before needing care would render the donor eligible for state funding of personal care. But a local authority subsequently undertaking a means assessment would regard it as "deliberate deprivation".

It is, however, possible to legitimately shelter assets from being taken into account as capital.  For example, on your father's death, some assets may automatically have passed to your mother as the surviving joint owner. This being so, you could re-visit your father's estate within two years of his death and effectively either re-write his Will or vary the effects of the intestacy rules which would have applied if he had died intestate, to create a Trust under which your mother could use the relevant asset without actually owning, or ever being deemed to have owned, your father's half share.  This would reduce her capital assets and shelter your father's former half share from being considered when calculating your mother's liability to care costs.  It may also mitigate liability for inheritance tax and the possible new 10% "death tax".