No one wants to have to think about what will happen if they are unable to care for themselves at the end of their lives. Often it seems easier to solely consider the Wills and how an estate will pass after death, but with the thresholds for funding care privately much lower than those of Inheritance Tax, it falls to the individual to cover the costs.
“One of the questions asked most frequently of Private Client lawyers is “How can I protect my Assets?” Historically, this question used to be followed with “from the tax man after my death”.
Clients often found that their main concern was Inheritance Tax and its ultimate impact on their estates. However, changes in our society have meant that other factors are now as pressing, if not more so, in relation to their concerns.”
The funding of Care in later life is a major concern for most clients. Very few people can say that this issue has not impacted on a friend or relative in some way. Unlike Inheritance Tax, this issue affects the majority of people rather than just the very wealthy because the funding bar is set so low. Compare the two regimes below:
- Inheritance Tax will only begin to fall due where a person’s estate has a value of above £325,000 and has a Tax rate of 40% applied to assets over and above that figure
- Care fees will fall to be funded by the resident themselves where they own assets of £23,250. Above this level they will be expected to fund 100% of the care costs until the balance of their assets drop to that level
Care costs within a care home environment vary hugely, ranging from £25,000 to £80,000 per year, depending on the level and complexity of care, type of care required and the type of accommodation chosen. Even at home, the cost of care can run to £80,000 or more per year if a persons needs are great and their health problems are complex.
The level of these costs has a huge impact on a person’s wealth in a very short period of time. This realisation often gives rise to two main concerns:
- Will there be anything left to pass to my family after my death?
- Is my choice of care sustainable?
The answer is often “not necessarily” unless there has been some forward planning and/or advice is sought in a timely manner.
For example, in circumstances where a person’s primary need is shown to be medical, funding will be provided by the NHS on a non-means tested basis.
There are many possibilities to be considered for most clients. Potential solutions often involve advice and input from more than one professional arena. Where it is practical to do so, solicitors will work in conjunction with other professions who are also experts in dealing with the very specific problems that care funding gives rise to, for example Independent Financial Advisers.
Often, these issues arise at a time when family circumstances are very trying and a placement for care must be found very quickly. Experience shows that at such a time, families feel ill-equipped to deal with the paperwork and funding issues.
Sydney Mitchell Solicitors are on hand to help advise you before you experience the difficulties of privately funding care. With their help, you will be able to plan for any eventuality and manage the financial implications that private care can have on yourself and your family, when it matters most. Preparation really is vital and can save your family from a multitude of difficulties at a very trying and confusing time.
We have no hesitation whatsoever in saying that the work that Tracy Creed did for us was totally first class. When we say we looked for an expert, we believe we found one. It is true to say she has made our lives easier and given us peace of mind.
Sam Bloxham
If you or a family member need advice or guidance in this complex area of the law, please contact Tracy Creed, Solicitor, Head of Wills, Trusts and Probate at Sydney Mitchell, Shirley, 0121 746 3300 t.creed@sydneymitchell.co.uk
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