FAQs about protection of your assets in old age


Understand the System

There are three things to understand which are:

 

Firstly, that there are three different types of care that the system can provide. They are community based care; residential based care and NHS care.

 

Secondly who is it who provides care? This is principally the local authority, the NHS and other providers.

 

Thirdly who pays? This will normally be the local authority if you are sufficiently poor, the NHS if you are sufficiently ill or yourself.

 

For more information contact abdcare.

 

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Understand the State Funding Rules

The start point is to understand the difference between non means tested funding and means tested funding. An example of non means tested funding is NHS continuing care. To qualify a person needs to have “a primary health need” in respect of either physical or mental health requirements. Means tested funding such as the cost of being in either a residential or nursing care environment is governed principally but not only by the 2014 "Care and Support Statutory Guidance" and a supporting regulation being "The Care and Support (Charging and Assessment of Resources) Regulations 2014". The principal money numbers to remember are that if you have capital which currently exceeds £23,250.00 you pay, whereas if you have capital which is less than £14,250.00 your capital will not be taken into account in assessing your ability to pay. Between these two numbers a tariff income applies.

 

For more information contact abdcare.

 

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Assess your Risk

Having understood both the system and the State Funding Rules ask yourself this simple question "Are you in need of care?"

If you are not in need of care consider asset protection for your estate and which will be for the benefit of both yourself and your next generation. Consider such things as making a Will, making an LPA, changing investment strategies and trying to shelter the family home.

 

If you are in need of care, still consider all of the above but no guarantees can be provided.

 

For more information contact abdcare.

 

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Make a Will

Almost everybody has the ability to make a Will. A Will allows you to control your position post death and not rely on the intestacy rules.

 

Wills should include such standard items as Executors, Guardians, Legacies and importantly what to do with the rest of your estate known as Residue. For the purposes of sheltering your property and other assets consider Will Trusts in particular fully flexible discretionary Trusts and life interest Trusts.

 

For more information contact abdcare.

 

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Make a Lasting Power of Attorney ("LPA")

There are two principal types of LPA. The most popular is the Financial LPA and secondly a Health and Welfare LPA. For each type of LPA you will be the Grantor and will need to nominate either one or more Attorneys. It will be necessary to decide the extent of the Attorney’s powers in the event of you either not being able to look after your own financial and/or welfare affairs or not wanting to.

 

To be effective LPA’s need to be registered with the Office of the Public Guardian.

 

If you have an existing EPA these are still valid.

 

For more information contact abdcare.

 

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Change Course on your Investment Strategies

For the purposes of sheltering investments from the juggernaut which is the cost of elderly care you should consider changing course from conventional share, unit trust, investment trust and standard savings products to such things as Investment Bonds underwritten by either a single or cluster of life policies and/or annuities. There are other Investment products that also need consideration.

 

For more information contact abdcare.

 

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Try to Shelter the Family Home

The family home is normally the most important and valuable single asset belonging to most people.

 

Things to consider include severing a joint tenancy if the property is jointly owned and the use of both lifetime and Will trusts. You also need to consider the question of control. If a property is given away questions that need to be asked are what happens if the new owner goes bankrupt and you are a tenant or your next of kin as new owners get involved in a divorce or there is a family squabble.

 

For more information contact abdcare.

 

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Deprivation of Assets and Discretion

In certain circumstances a local authority can still treat you as still possessing an asset. This applies if they take the view that you deprived yourself of a capital item in order to reduce your liability to accommodation or other elderly care charges. In making a decision on this point the local authority will look at, amongst other things, your purpose in disposing of an asset and the timing of the disposal.

 

A local authority can pursue the new owner of the asset or in the alternative they can over any time period assess you on the basis that you still own the asset.

 

Additionally and In respect of your residence a local authority has discretion to disregard this asset.

 

For more information contact abdcare.

 

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