Long Term Care Planning

Most long-term care is overseen by the Local Authority, beginning with:

• A needs assessment to determine whether residential or nursing care is required.
• A financial assessment to determine how much you must contribute.

How funding works

• Your income is used first, leaving you only a small personal allowance.
• With care costing around £6,000 per month, any shortfall is taken from your capital until it falls to £23,250.
• The Local Authority contributes more as capital reduces but only fully steps in once it reaches £14,250.

Key question: How can you protect your assets from being completely eroded by care fees?

1. Will Trusts

Many couples leave everything to each other, but this leaves assets vulnerable if the survivor needs care.

Instead, consider placing the first spouse’s assets into a will trust, which:

• Provides for the surviving partner’s needs.
• Ring-fences the capital from care fee assessments.
• Applies to married, unmarried and same-sex couples.

If property is owned jointly, it should be held as tenants in common to allow your share to pass into the trust.

2. Lifetime Gifts

Some consider gifting property or assets during their lifetime.

• If the Local Authority believes the purpose was to avoid care fees, it may be classed as deliberate deprivation, making the gift ineffective.
• The Inheritance Tax 7-year rule is irrelevant for care fee assessments.
• Any gifting should be done when you are well, not when care is foreseeable.
• Prefer gifting into a trust, not directly to children, to protect against family disputes or financial risks.

3. Investment Bonds

• Certain Investment Bonds are treated as disregarded capital in care assessments.
• They must be arranged carefully to avoid allegations of deliberate deprivation.
• They should always be set up with advice from a qualified Financial Adviser.

Next steps

To explore how trusts and other strategies can protect your assets, you’re welcome to attend a free seminar or book an appointment.