The Willwriting Partnership

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How your estate could be used to pay nursing and care home fees

What happens if I don't have a Family Asset Protection Trust?

Your estate could be lowered in value, and you may be unable to provide for your family in the way you intended. We have provided the basic rules covering fees for nursing and care homes that should help show you how and why the Family Asset Protection Trust will benefit you and your family now and in the future.

Rule 1:

If the care assessment carried out by doctors etc finds that someone needs long term care then the local authority must provide that care. They must pay for that care if you are not in the position to do so for yourself. Family can, if they wish, arrange their own care and also pay for it themselves, but if they can not do this, then the local authority has to pay. It is a statutory obligation and there are no conditions attached to it.

Rule 2:

In the case of Robertson V Fife Council 2002 it was decided that if someone needs long term nursing care the Council are not allowed to take assets into account when deciding whether to provide the care. They are allowed to take assets into account if you have deliberately deprived yourself of that asset in order to avoid paying nursing fees.

Rule 3:

Government have issued guidelines called the Charging for Residential Accommodation Guide or ‘CRAG’. This is the bible that all local authorities use. The rules state that it would be unreasonable to decide that deliberate deprivation had taken place if the disposal of the asset took place when you were fit and healthy and you did not foresee the need to move into residential care. This is a two part test – firstly, timing, the longer the gap between putting assets into trust and going into care the better and secondly, foresee-ability – at the time the asset was transferred into the trust, were you appointed a social worker to make decisions about care. If you transfer the property before a social worker becomes involved, it is argued that you did not foresee that you would need care.

Rule 4:

Under the Health and Social Securities & Social Adjudication Act 1983, if an asset is put into trust, and the CRAG test failed, all is not lost. The local authority can only recover the asset from the trustees if the client takes up residence in the care home within 6 months of the asset going into trust.

In law, the local authority can go back as far as they like to ascertain what you did with your assets and when. However, as far as being able to recover those assets then the period is 6 months. The 6 month period starts not when the trust is set up, but when the assets are put into the trust. The 6 months end when you move into the care home.

The six month rule is quite simple. If you go into care within 6 months of the transfer into the trust, then the trust will fail. In that case no harm is done except that the trust did not work for care fees. You will have already had the benefit of not needing to pay probate fees.

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