Can I give away my assets to avoid having to pay care fees?

This is a question I am fairly regularly asked and in short the answer is ‘no’. I have found that people can be very frustrated when they realise they will have to self fund their care costs if they have over a certain level of assets. In response to this, the first thought moves to offloading their assets so that the Local Authority will pay the care costs, this tactic is against the law and is known as ‘deprivation of assets’.

Under the statutory guidance within the Care Act 2014 deprivation of assets is described as:

“Deprivation of assets means where a person has intentionally deprived or decreased their overall assets in order to reduce the amount they are charged towards their care. This means that they must have known that they needed care and support and have reduced their assets in order to reduce the contribution they are asked to make towards the cost of that care and support”.

The Local Authority will look at a case and have to decide whether any disposal of assets are ‘deliberate’; there are many areas they would look at and these would likely include:

  • Was the main reason of disposing of the assets to avoid care charges?
  • There is no set time limit, they would look at the time the individual realised they needed care and when the assets were disposed of
  • If the disposal was significant to make a difference to the individuals’ capital, this could be a one off disposal or a series of smaller ones

In order to recover any debts, the Local Authority are able to use the County Court but this would generally be after other avenues have been exhausted. They have the ability to recover any funds from a third party, this would be the difference between the care fees that would have been charged if the assets had not been ‘given away’ and what was actually charged.

In summary, people are not allowed to give away assets in order to try and reduce the level of care fees they have to pay. If it looks like care will be needed, very careful consideration needs to be given as to why any gifts are made and the impact this has on the total wealth of the individual. It is important to look at whether the need for care could be foreseen, this is not just purely based on age but the health of the individual at the time the gift was made.

As a Later Life planning specialist at Wingate, long term care fee planning is an area I focus on. If you, or a loved one, has the need for care then I am happy to bear the cost of an initial meeting to discuss your options and whether I can help.

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