What do I do when a loved one goes into care?

JACOB ROBINSON >

Partner

Fri 6 January 2023 What do I do when a loved one goes into care?

It can be a stressful time for a family or friend when it ceases to be suitable for a loved one to continue to receive care at home. The potential legal and financial practicalities can also often seem daunting.

Jacob Robinson, Partner in our Wills, Trusts and Probate department answers several commonly asked questions that come up regarding this topic.

Q: Do you have Lasting Power of Attorney?

A: A person can make a lasting power of attorney whilst they have sufficient mental capacity to make the decision to do so themselves. There are two types of lasting power of attorney:

Property and financial affairs; and
Health and welfare.

If these are in place in advance of a person losing capacity to make their own decisions easily on these topics, then this will simplify the process for those wishing to assist their loved ones.

Q: Do I have to make a Court of Protection application?

A: If there is not a Lasting Power of Attorney in place then it might be necessary to consider making an application to the court of protection for a deputy to be appointed.

The Court of Protection is the ultimate decision maker in relation to those lacking capacity to make decisions themselves.

It should be noted that the application process and ongoing management of the person’s affairs are both more expensive and administratively burdensome than if there were Lasting Powers of Attorney in place.

There are currently long delays with the court dealing with these applications, so it is best to get the ball rolling with this as soon as possible.

Q:What happens to my loved ones house if they go into care and share it with someone else?

A: If the person’s living arrangements prior to their death were such that they owned their own residence and shared it with another individual then it might be the case that the property value will not be included in a financial assessment for care fees.This could depend on the relationship to the person as well as the age of the habitant, as well as on policy of the Local Authority. You can discuss with the Local Authority to confirm the position and can query if you are not sure if their decision is correct.

Q: My loved one doesn’t own a property, are next of kin responsible for care home fees?

A:A financial assessment will be carried out by the Local Authority to consider the person’s assets. If they exceed £23,250 (as of December 2022) then they will need to self-fund their care. If they are less than £23,250 (as at time of writing) then the Local Authority will contribute towards care.

There is no requirement for anybody else to fund care, however this may be a consideration if a particular care home is desired that the Local Authority will not fund sufficiently.

Q: Can I buy my loved ones house, if they go into care?

A: In theory, yes – although it is necessary to be extremely careful with such a transaction. It would be necessary to ensure that the transaction is at market value, so it may be necessary to arrange a surveyor’s report to determine this.

A sale at an undervalue leads to the same issues as with gifts.

Q: What to do if they would like to gift the property?

A: We occasionally receive queries where an individual wishes to gift their share in their property to a friend or family member with the view to mitigate liability for care fees or for inheritance tax. This does not work and can cause further issues.

One such being security of tenure – if there is an intention to remain at the property then it being owned by another person could mean that they seek to remove the donor of the gift.

Additionally, this could be seen to be a gift with a reservation of benefit, or deliberate deprivation of assets – which could result in complexities with a Local Authority taking action, or HM Revenue and Customs including the value in inheritance tax calculations.

A larger gift (i.e., anything out of ordinary gifts) should not be made by an attorney or deputy without specific consent of the court of protection.

Q: Can my loved one put assets ‘in trust’?

A: Where the asset concerned is a person’s main residence then this falls foul of the same issues as gifts.

We would not usually recommend that a person does this for the aim of mitigating care fees or inheritance tax liability.

If you would like additional information on the above, please contact Jacob Robinson by clicking the ‘contact us’ button to email him directly or call Jacob on 020 3551 80964 at our London Bridge Office.