Sadly, as we grow older both our physical and mental health can also deteriorate. It is now estimated that one in four of us is likely to be living in a care home during the final years of our life, which can cost upwards of £40,000 per year. For most people in later life, their family home is likely to be their largest asset on which they will need to draw upon to meet the costs of care. Dependent upon your circumstances and the time spent living in a care home, both your savings and the equity in the family home can be eroded. Despite this knowledge, very few of us consider the financial implications until it is too late.
Many people assume they can give away their homes, or other assets, to their children to avoid paying care home fees. Whilst they are indeed able to do so, doing this does pose a number of personal risks and can leave them more vulnerable in the future. Furthermore, this course of action does not actually guarantee any protection of the family home or other assets, as this may be viewed as deliberate deprivation of capital by the Local Authority when an assessment of a person’s finances is undertaken.
Many couples do not realise that one solution to safeguarding assets from being used to cover the costs of long term care is by creating an effective Will, in the appropriate circumstances. Reiss Matthews a solicitor in the Wills, Tax and Probate Department at Enoch Evans LLP comments that; “if a couple prepare an effective Will it can then often ensure that a proportion of their assets can be protected and ultimately left to their loved ones. I would therefore urge anyone who is concerned about mitigating the potential threat care fees pose to their assets, to seek independent and professional advice, so that any possible steps can be taken, before it is too late.”