Long term care – what inheritance?

Posted by Minesh Patel

Minesh Patel looks at the issues surrounding long term care and how being proactive now can help you avoid the postcode lottery of local authority care.

long term care fundingStatistics prove we are living longer which will increase the number of people requiring long term care. At present anyone with assets over £23,500 cannot get help with care costs. The average cost of care in 2025 will be £33,000 each year. The total cost of long term care will rise to £38billlion by 2025.

A recent report from Andrew Dilnot reviewing the funding system for long term care suggests a cap on the amount paid towards the cost of care be set at around £35,000 and recommends only those with assets over £100,000 should pay. 

He also recommended a standardised system for care costs across all the UK, at present some Local Authorities provide better support than others. One of the lesser known schemes currently available is the deferred payment scheme where an interest free loan is provided during the period of care which is repaid on the death of the homeowner. From 2015 this scheme is set to be extended but with interest applying. If you home is owned jointly and only one person requires long term care the home is disregarded and the Local Authority cannot use this in their calculations.

The area of long term care is complex and if you are facing paying for long term care then you should seek help from the Local Authority to discuss the options available.

Ways to fund long term care:

  • Self-Funding you have sufficient assets and income to pay for long term care- for many wealthier people this provides choice on the home selected.
  • Sell the home providing liquids funds for funding long term care.
  • A deferred payment arrangement
  • Residential care plans offered by providers such as Partnership and LV.

It is important that Lasting Powers of Attorney are drafted in advance of the elderly losing physical and mental capacity registered with the court of protection once physical and mental capacity begins to be lost. 

Ensure Wills are updated appointing executors and i would suggest that the attorneys of the LPA make the beneficiaries aware of the cost of funding which will avoid family disputes in the future. Many people who were anticipating a legacy from their parents are left devastated that the state is the major recipient of assets their parents and loved ones have amassed. There is no getting away from the statistics the state cannot fund long term care for all but the poorest.

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