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13/07/2011 12:21:58 www.clicklegalservices.co.uk Administrator Posts: 374

If a person goes into local authority care, Government Regulations presently state that no person is to be assessed as being unable to pay (care home fees) - if their capital exceeds (presently in England) £23,250. In other words if their capital exceeds £23,250, they are liable to pay. 1. Setting up a Trust can protect assets - investments, property and cash - even if they do not own their home. Assets held “in trust” can be disregarded for care assessment purposes – provided: (A) the trust is set up properly; (B) is not done simply to avoid nursing home charges; and (C) the assets are appropriately ‘ring-fenced’ in time. 2. Having Solicitors as Trustees ensures that your assets within the Trust benefit those that you specifically want it to. 3. Whether it is an outright gift - or the creation of a Trust - does not really matter in most cases though – what does matter, is the purpose of the transfer into the Trust or the gift. 4. Regulations also provide for the recovery of care home fees where assets have been disposed of “knowingly and with the intention of avoiding charges for the accommodation” by a resident (whilst residing in care - or not more than 6 months prior to going into care). A person still may be treated as “possessing” capital (even if they have deprived themselves of it) though. Therefore, even if the creation of the Trust or the Transfer/Gift took place more than 6 months prior to going into care - then the capital disposed of - could still be assessed as if it was still in their possession. 5. There is no easy way of drafting a Trust so as to put the assets beyond Local Authority assessment. One thing is for sure - if the intention is “deprivation of assets” – and/or within 6 months of going into care, then no amount of legal drafting will work. 6. Whether a Trust is used, it is liable to be treated as a “disposition of an asset” - and it is always a risk to give away your main asset. 7. Whether the local authority will treat it as a “deprivation of an asset” though is decided on an individual basis. Both an outright gift and a gift to trustees can amount to a “deprivation”. 8. The person concerned has to be “capable” of creating such a Trust/Gift. If they are unlikely to be able to appreciate what they are doing, then this may not be possible. 9. If their child gets divorced - the property would be part of the financial settlement in that divorce 10. Compare the cost of the Trust/work involved in making a Gift - compared to the average cost per week in a typical nursing home? The sooner you “donate” – or put assets into a Trust - the better chance you have of being protected. But once you give, you cannot take back.

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