My dad has dementia and his condition has deteriorated recently. Sadly
it’s probably time he had full time care in a care home. My mum died about five
years ago, so we will probably have to sell the house to pay for his care – I
think it’s worth about £180,000. He has £20,000 in other savings and a small
pension that brings in about £5,000 a year on top of his state pension (he’s
aged 72). I’ve heard care costs around £1,000 a week so his money will not last
long. He was proud that he would be leaving something behind for my brother and
me after his death: what can I do to prevent it all disappearing? I have Power
of Attorney over his money so can I give some of the money to myself and my
brother now?
I’m so sorry to hear about your dad. Deciding to
move him into care can’t be an easy decision and money worries won’t help. Let
me deal with your second question first: it isn’t advisable to give money away
to avoid paying care fees. When assessing your father’s finances to see if he’s
eligible for financial support, your local authority may well consider any
gifts made now to be “deliberate deprivation of assets” and may count the
amount given away as part of his overall wealth.
You can make gifts on his behalf as his
attorney, but they must follow the kind of gifting pattern that he has
established in the past.
The reported fees of £1,000 a week you have
heard are the average across the UK for nursing and residential care combined.
If your dad doesn’t need nursing care, average fees are around £700 a week – so
not quite so bad, but your dad’s current assets may be significantly depleted.
You can ringfence the amount that will go to pay care fees by purchasing a care
fees annuity that will provide a top-up to his income to meet the cost of care.
This is usually tax-efficient as it is normally paid direct to the care home
rather than your dad, so not taxed as income. It will require a substantial sum
to purchase the plan, but it will limit the total spent on his care. Talk to a
financial adviser.
If you’re not ready to sell his house yet, local
authorities are now obliged to offer what is known as a deferred payment
agreement, whereby the council pay your dad’s care fees until either the
property is sold, or until he dies – whichever is soonest – when the amount
will have to be repaid, along with associated charges.
SOURCE: Eastern Daily Press, Mark Shields
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