Legal News | 22.09.22
Sharing is caring… or is it?
In an ageing population, it is no surprise that care costs are an increasingly important consideration for more and more people. Under current rules, a person with capital assets (for example, investments, property, savings) of more than £23,250 will be required to fund their own care without help from their local authority.
However, it is a common misconception that if a person reduces their capital assets below this limit (for example, by gifting assets to children, grandchildren or to a trust), that they will automatically qualify for local authority funding.
In fact, if, when assessing a person’s finances, a local authority concludes that the person deprived him- or herself of a capital asset with the intention of avoiding care costs, it can treat the person as though they still own the asset.
Before a local authority can conclude that there has been a “deprivation of capital”, it must satisfy itself that the answer to each of the following questions is “yes”.
- Could the person have had a reasonable expectation of needing care?
- Could the person have had a reasonable expectation of needing to contribute towards the costs of that care?
- Was avoiding care costs a significant motivation in the timing of disposing of the asset?
The Local Government and Social Care Ombudsman has recently issued guidance on deprivation of capital for local authorities. The guidance says that a local authority should conduct a thorough investigation before concluding that there has been a deprivation of capital. The local authority should explain its reasons and have a process for challenging its decision.
If you would like further information on care costs or estate planning more generally, please e-mail Wansbroughs’ private client team at wealth@wansbroughs.com.
