FBC Manby Bowdler Senior Associate Graham Fuller is a member of Solicitors for the Elderly and a Dementia Champion. He is also a legal expert on care fees and asset protection.
Amid a background of rising care costs, he and the team at the award-winning law firm have more than 40 talks booked in the coming month on the issues surrounding later life planning. Here he explains why although being motivated to protect your assets from care fees is nothing new – in recent years people have taken unnecessary risks to protect their house from care fees.
“Ultimately, the decision as to whether a person does or does not wish to protect their assets from care fees is a personal one. The key is to make sure that a fully informed decision is made where the person understands the implications of the planning they are putting in place.
“I’ve heard sentiments ranging from “I have paid tax all my life and I should not have to pay for care when I need it” to “Why should I pay when the person in the bed next to me gets care for free?”
“The BBC has been running an awareness campaign about aggressive care fee planning schemes involving lifetime gifts. The background to this dates from 2011, when a BBC documentary focused on a scheme promoted by an organisation known as Universal Wealth Preservation. Under the scheme people were advised to give their home away during their lifetime by putting it in to a trust to avoid care fees.
In April 2017, the campaign continued with BBC Money Box speaking with Universal Wealth Protection customers who expressed their views that they were misled as to the operation of the scheme and now felt very vulnerable.
When considering any care fee planning schemes, it is important to understand the rules relating to care funding. Any lifetime gift of assets is subject to the Deprivation of Capital rules. Essentially, the rules provide that if you give assets away with the intention of deliberately avoiding your obligation to pay for care, then the Local Authority can set the transaction aside.
There are also other practical risks associated with giving your assets away during your lifetime because you are no longer the legal owner of the assets. By way of example, you may need the assets in later life, your relationship with the recipient of the gift may change, the recipient of the gift may die before you or experience financial or matrimonial difficulties which could mean that your intended recipient no longer enjoys the benefit of the assets gifted to them. All of these circumstances (which are outside of your control) could make you very vulnerable indeed.
There are other less aggressive estate planning options available, although perhaps more relevant to joint property owners, where assets can be protected from care fees with the preparation of specialist wills. Advice should always be taken from a specialist solicitor in order to understand all of your options before making any decision. There is no one particular option that is suitable for all. The gateway is to sit down with an adviser to discuss your particular circumstances and establish what is right for you.
When seeking advice on care fees and later life planning, you should look for solicitors who are fully accredited members of Solicitors for the Elderly, an independent organisation setting benchmark standards for specialist advice for elderly and vulnerable clients.