Care home fees – When can a gift be made?
27 April 2022 by Gemma Wright
Clients are often concerned how they can best preserve their assets for their families and if there is anything they can do now to plan for the future. One of the areas we would discuss is whether any gifts they wish to make now could be classed as a ‘deliberate’ deprivation of assets to avoid or reduce paying for future care home fees.
Social Services are increasingly looking at whether an adult with social care needs has previously made gifts with the intention of reducing the amount they will pay for their care (if they would be assessed as self-funding). They will consider gifts which have been made particularly where the client was not of high net worth and has relatively modest assets.
Social Services may consider the following:-
- Has there been a ‘deliberate’ deprivation? The purpose and timing of the gift is significant here;
- When a deprivation can be inferred;
- Regulations – we would advise you on these;
- Whether the person is to be treated as possessing capital, of which they have deprived themselves, for the purpose of decreasing the amount that they may be liable to pay towards the cost of care.
How we can help:-
- We would consider the asset you wish to gift;
- Discuss whether the gift is a disposal or ‘deprivation’ of capital;
- Discuss whether the purpose of the gift is to avoid or reduce care home fees – this is a subjective test. There may be other reasons for wanting to make gifts, for example, gifting a grandchild money for a deposit on a house;
- Consider whether you have a reasonable expectation of needing/contributing towards care at the time of the disposal. For example, if a client transfers their property into the names of their children the day before they enter a care home, the Local Authority is likely to treat that person as if they still own that asset.
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