Wills & Probate
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Elderly Care Issues
Many clients contact us when their parents need residential care or may need to go into a nursing home. It is important that these issues should be considered in advance so that necessary steps may be taken to protect their capital including their residential home.
Should an elderly client be required to go into care they will have to pay from their assets towards the cost of that care, reducing the value of the estate that they would have hoped to leave to their children on their death.
Community Care Fees
If a client’s assets are valued at less than £14,000 then none of those assets will be taken into account in calculating how much you have to contribute to the cost of your care. The cost of care provided for that client will be met.
Where the total assets are between £14,000 and £23,000, there is a contribution by the client towards the cost of care up until the point when the assets are reduced to £14,000 when the whole costs of care are then met.
Where the value of assets exceeds £23,000 then the client meets the whole costs of care.
Assets not taken into consideration when assessing Community Care Fees.
The client’s residential property is not taken into account for the first 12 weeks of a permanent stay or if the house is occupied by:
- The spouse or civil partner
- A relative aged 60 or over
- A disabled relative
- Child under 16 and the resident is liable for their care
Other capital assets not taken into consideration include:
- Surrender value of a life policy
- Personal possessions
National Health Service
The NHS still plays a part where a client requires medical treatment and resides in a nursing home. The NHS may contribute £101 per week to cover the nursing element of care, but each case is assessed on its own merits.
Disposal of assets
If a client disposes of their assets to their children for instance, the Local Authority may assume that the assets have been disposed of to avoid the costs of community care fees. If the Local Authority has good reason to believe that this is the case then the client may be treated as though they are still in possession of those assets for the purposes of assessing the community care fees.
Other factors to take into account when transferring assets to your children would be the matters that your children are likely to face:
- Divorce – the assets will be subject to the divorce proceedings.
- Bankruptcy – the assets will be subject to the bankruptcy proceedings.
- Capital Gains Tax – applies to your residential home and would be relevant if your child does not occupy the property as their main residence. When the property is sold and profit is made it becomes subject to capital gains tax. This amount may be reduced by using a personal allowance currently £10,100 (2010 – 2011).
- Inheritance Tax – If your estate is valued more than £325,000 and you transfer assets, you will need to consider the Inheritance Tax rules.
At Latimer Lee Solicitors Limited we aim to provide a friendly and efficient service to assist you with these sensitive matters.