​Why you should think twice about trying to avoid care fees

Care fees are a big worry for many families. With nursing care fees now averaging £800 a week, more and more families are seeking ways to avoid paying for care in the hope of passing on as much of their money as possible to their loved ones.

Under the current care rules, local authorities may contribute some or all of the cost of care where an individual’s total assets fall below £23,250.

Sadly, we are seeing more and more unregulated companies targeting older people in the hope of persuading them to in invest in schemes promising to help them avoid paying care fees and inheritance tax. These types of schemes usually involve putting your home into trust during your lifetime, thereby reducing your assets significantly.

The issue with these types of trusts is that they are a deliberate attempt to deprive yourself of assets to avoid paying care fees. This is illegal and in our experience we find that it does not work. If you are found to have deliberately given away assets for this purpose then you will be treated as if you still own them in any financial assessment for care fees. Local authorities can ask for the money to be repaid and they can place a charge over the property so that it can be repaid once the property is sold.

Deprivation of assets is not limited to putting your house into trust. Other examples include gifting your family or friends large sums of money, gifting other properties that you own, selling an asset at an undervalue to a family member or friend, or even spending money on extravagant holidays. When deciding if this deprivation was deliberate the local authority might look at:

• Motivation – was the main reason to avoid paying care fees?
• Timing – how recently was the asset given away before the individual went into care?
• Amount – does the gift significantly reduce the individuals assets?

If you are concerned about the possibility of going into care we recommend seeking proper legal advice in relation to estate planning and making a Will. Your Will should reflect your current financial and family circumstances and it is important to ensure that your Will does what you seek it to do. For couples, having the correct Wills for your circumstances may help to protect some of your combined assets from care fees when the first of you has died.

If you’d like to discuss any of the above matters with a member of our team, please contact us on 0113 201 4900 or wills.probate@emsleys.co.uk.