Elder Care / Care Home Funding / Protecting Assets
Discussion
I hope this is the correct place for this, and I think the Title sums it up.
A relative of mine is now in a Care Home, and is, rather late in the day, looking to:
a) Ensure that she has a decent care facility to live her time out (that box is hopefully ticked following a lot of investigating/searching/bit of luck)
b) Wants to leave some inheritance to family (to clarify, I would not be a beneficiary of her will now, or even along the line, but this is one of her desires)
I also have c) Ensure that she has appropriate funding for that home. Assuming there is no state assistance, the following will be wiped out pretty quickly...
Her situation is typical in that she has a small (paid for) home, some savings, and a regular pension income. All of this has been declared on a form completed when she went into care. Her health is not good (hence she is in care), but the expectation is that she could survive for a number of years. The care home costs almost three times the level of her income (accounting for a care allowance), and the savings will be exhausted pretty quickly.
Other relatives have sought advice from not-for-profits/other organisations that seem to be advising to sell the house and invest the proceeds to cover the care costs or to buy a Care Annuity, and another has suggested that a Life Assurance plan (in Trust) could assist on the inheritance side.
She is frail at the moment having had a period of time in hospital prior to going into care, and the expectation is that she will remain as such.
Any thoughts or tips would be gratefully received here or via Private Message. Thanks.
A relative of mine is now in a Care Home, and is, rather late in the day, looking to:
a) Ensure that she has a decent care facility to live her time out (that box is hopefully ticked following a lot of investigating/searching/bit of luck)
b) Wants to leave some inheritance to family (to clarify, I would not be a beneficiary of her will now, or even along the line, but this is one of her desires)
I also have c) Ensure that she has appropriate funding for that home. Assuming there is no state assistance, the following will be wiped out pretty quickly...
Her situation is typical in that she has a small (paid for) home, some savings, and a regular pension income. All of this has been declared on a form completed when she went into care. Her health is not good (hence she is in care), but the expectation is that she could survive for a number of years. The care home costs almost three times the level of her income (accounting for a care allowance), and the savings will be exhausted pretty quickly.
Other relatives have sought advice from not-for-profits/other organisations that seem to be advising to sell the house and invest the proceeds to cover the care costs or to buy a Care Annuity, and another has suggested that a Life Assurance plan (in Trust) could assist on the inheritance side.
She is frail at the moment having had a period of time in hospital prior to going into care, and the expectation is that she will remain as such.
Any thoughts or tips would be gratefully received here or via Private Message. Thanks.
I'm in a similar situation in respect of my aunt so l can empathise. From my understanding, it's probably too late to do anything now but l'm sure someone with more experience than l will be along soon.
Fortunately for my aunt, her income is only about £500 pm shy of the home fees so, given the level of her savings, she is more than covered unless she lives to beyond 130!
One thing to look at though (if you haven't already) is attendance allowance - the amount will depend on whether it's a Residential or Nursing home. Qualification is automatic but you still have to apply and it's only applicable from the date of application - i.e. no back dating (wish l'd known all that when aunt was first diagnosed with dementia in 2010!).
Best of luck.
Fortunately for my aunt, her income is only about £500 pm shy of the home fees so, given the level of her savings, she is more than covered unless she lives to beyond 130!
One thing to look at though (if you haven't already) is attendance allowance - the amount will depend on whether it's a Residential or Nursing home. Qualification is automatic but you still have to apply and it's only applicable from the date of application - i.e. no back dating (wish l'd known all that when aunt was first diagnosed with dementia in 2010!).
Best of luck.
mike74 said:
Isn't the final £30k of assets excluded from care home fees?
If so then surely you've nothing to worry about, granny gets the the best possible care and treatment and the relatives still get a lovely £30k inheritance... everyone's a winner.
Not £30k, lower capital limit £14,250 when care costs will be covered.If so then surely you've nothing to worry about, granny gets the the best possible care and treatment and the relatives still get a lovely £30k inheritance... everyone's a winner.
rfisher said:
Is anyone else living there?
If not then consider renting it out.
Selling should be the last option on the list if her wishes are to be realised.
Yes, it's worth running the numbers on this with a conservative estimate of the net rental income (after voids, fees, maintenance, taxes and so on) to see how long she can last on savings + pension income + rental income. Estimate when the crunch comes and work back a sensible number of months from that, which is when you need to notify the tenants and sell the house. It may be that that point is today.If not then consider renting it out.
Selling should be the last option on the list if her wishes are to be realised.
At that point you sell the property and re-invest the proceeds in something that you can progressively liquidate over time. I imagine that you want lower-risk asset classes such as fixed income rather than shares at her stage in life.
It sounds like IHT is not a worry so you don't need to avail of the particular 'family home' reliefs. I think that there is probably not that much you can do at this stage to structure around funding her care home fees.
Thanks for the replies. Much as I expected. Still, the problem will inevitably hit people I do have direct "responsibility" for so it's good to get prepared for them if it's not too late.
In terms of figures, the care home is more than £1200 a week so any savings will disappear fast. Weirdly, if that's the correct word, she does not want to rent the place out so I am wondering if it makes sense to sell it.
In answer to the point about her health, she needs care, but that's more related to physical rather than mental health issues.
In terms of figures, the care home is more than £1200 a week so any savings will disappear fast. Weirdly, if that's the correct word, she does not want to rent the place out so I am wondering if it makes sense to sell it.
In answer to the point about her health, she needs care, but that's more related to physical rather than mental health issues.
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