15 – I have given away some assets. What can the Local Authority or Council do?
The extent of the power your Local Authority has can often be challenged as there is at times some subjectivity involved.
However, you should note that if you do enter care within 6 months of gifting your assets and property, the council can still send the bill for the care costs to the person that the gift was gifted too. So, if for example, you gave your family home to your children, then they could be responsible for meeting your care fees.
Likewise, if you set up a trust, the local authority can still approach the Trustees of the trust, irrespective of the time it was set up.
The difficulty with gifting assets is that there is no legal time limit in which the local authority can assume that you have ownership of the asset even if you have given it away.
You could have gifted your assets many years previously, and they can still count.
Whilst it is not a hard and fast rule if the gift was made whilst you were in good health then it is harder for the local authority to link the giving away of the asset with the aim of avoiding care fees.
The value of the assets that were given away is called ‘notional capital’.
The value of a person’s ‘notional capital’ will be included in their overall asset value when they have their financial assessment.
So, in the example of giving your family home to your children, not only could you end up with the double whammy of having to pay for your care and also not having a house to fund your care costs.
16 – Is equity release an option I should consider if I need to pay for my care?
In short, the answer to this is maybe. All funding options should be considered, and it is important that equity release is considered as part of that. You can read more here about how equity release works.
You can also see a video on how equity release works on youtube.
Essentially, a scheme will allow you to borrow money against the value of your family house. However, it will only be available if you intend to receive care at home.
Many schemes will not apply once you move into a care home. If you are able to access it, you can use this to meet your care costs, make home improvements to make life a little more comfortable and continue living in your home. The lending is then only repaid on death.
The popularity and growth in these schemes is something we strongly suggest you consider if you decide to take care at home. This is a very complex area, and you do need to seek advice.
You can also see a video on the pros and cons of equity release on youtube.
17 – How much tax-free money could I get from Equity Release?
The amount that you can get as a tax-free lump sum will depend on the value of your property.
Try the calculator below to see how much money you could receive to help pay for your care costs.
18 – Advice on care home fees – Who can I speak to?
We have a directory of UK care fees funding specialists who can give you advice on care home fees and what the best options are for you to manage your money and wealth and not pay any more than you need to for your care.
Click here to look for a care fees advisor in your local area.
19 – How do I know which funding option is right for me?
With a number of options on the table (each with rather complicated criteria and features) it can be difficult to feel confident in making a decision.
You want to ensure that whatever decision you make is right for you – which is why information and professional advice is key.
Your choice will depend on your personal financial situation and preferences – but there are a few key things you’ll need to consider.
Things you need to consider
Your funds and assets: How much money do you have? This includes savings, bonds, shares, your family home and other assets
Your prognosis: Is your health likely to stay the same or deteriorate? Have you budgeted for either eventuality?
Inheritance Plans: If you wish to leave money or property to your relatives this will affect the type of care funding you choose. Likewise, you may be thinking about inheritance tax planning.
Benefits and pensions: Are you claiming everything you’re entitled to? Could choosing one of care funding option mean that you lose your benefits? Women and men whose spouse or civil partner died before 2005 in the armed services may also be entitled to an additional Widows Pension or War Widowers pension.
You can find details of which benefits you may be entitled to on the gov.uk website or through booking an appointment at your local Citizens Advice Bureau
Personal preferences: If you are very specific about the type of care home you’d like to live in (perhaps you already have one in mind) – it’s important to know the cost of this and ensure you can meet that cost indefinitely
Local authority provision: Some local authority care homes are very good. Others are not. The deferred payment schemes offered by councils also differ geographically. The quality of council care homes in your area (and the funding assistance on offer) may influence your decision
Click here to find a care fees advisor in your local area.
20 – What are my options to pay for care?
The good news for individuals requiring care and their families is that there are plenty of funding options on the table – provided the financial aspect of care is considered early enough. The sooner provisions are made, the more flexible options you have.
Careful planning can ensure you fund your care in the most efficient way possible and avoid paying any unnecessary costs. An advisor can help you look at your options as well as ensure you claim all of the benefits you are entitled to. Therefore, mitigation rather than avoidance is the key.
Options include (but are not limited to) the following. You can find out more about each of these in our handy guides:
- Care Annuity
- Rental of Property
- Equity Release – You can click here to find a specialist that can help you see if it is the best option for you.
- Deferred Payment Schemes
- Using your savings and investments
However, this can also be a challenging prospect – as with so many options available, it can be difficult to know which choice to make. This is why sound, professional advice is so important.
Here is a video on how a care annuity works.