Care home fees and making decisions about your home
Care home fees and making decisions about your home have been a recurrent theme raised by enquirers at Stonehewer Moss solicitors in Nortwhich during WillAid month. Solicitor at the Cheshire practice Michael Brennan has assisted as seems practical but is wary of giving the impression that it is possible to give a single piece of advice on this grim but increasingly unavoidable issue. In essence the obvious point to take is that you should have a will professionally drawn and use the opportunity to take advice about means to retain family assets when possible. Wills should be considered a living thing that should be reviewed as we age; what counted in middle age may be less important as we head to our 70s. While care home fees become real as we advance to old age, later middle age might be the best time to consider tax planning with an eye on this issue. Transfer of assets has inherent risks and trust are subject to changes in the tax laws that you must keep under review. To borrow a phrase from Dads Army, however, “Don`t panic”. Giving your hard earned assets away means it is beyond your control and who knows what will come of the beneficiary; death, ill health, addiction and divorce hits all ages and classes. Tax and care home frees create competing demands and sometimes you cannot square the circle. For a clear idea of best practice Michael has copied below and extract from a 2011 Law Society advice note to solicitors.
“Does your client wish to ensure that a particular person inherits an asset? This objective could be achieved simply by making a will.
Other points to consider could be:
- Is your client seeking peace of mind by making the gift? Do they think it provides certainty for the future or satisfies a moral obligation?
- Will the gift affect others who might have expected to eventually inherit a share of the asset?
If the intention in making the gift is to avoid tax, you should ensure that your client is aware of all tax implications, including Inheritance Tax, Capital Gains Tax and Pre-Owned Asset Tax. There are additional considerations if your client retains the benefit of an asset after giving it away. For instance, if the recipient of the gift dies before the donor, the asset may be subject to Inheritance Tax.
If your client is seeking relief from the worry and responsibility of owning an asset, granting a lasting power of attorney to a family member may be a better way of dealing with this issue.
If your client wants to avoid the value of their assets being taken into account for means testing, such as when they foresee the need to pay for long-term care, your advice must deal with the consequences of such an action, including tax implications and the risks in relation to deprivation of assets.”
Death and taxes are certain; litigation by cash strapped local authorities to set aside transfer of assets perhaps less so, but consider first whether the capital disregard rules make the drastic step of giving away your home necessary. Take advice and be wary of unregulated sources of advice.
For help preparing a will and advice please call 01606872200 or e mail firstname.lastname@example.org visit www.stonehewermoss.co.uk