Many people find the prospect of paying for care rather daunting, especially as they continue to increase. If you have care needs and are considering putting care in place, or moving into a care home, you may be wondering whether there is any way to avoid paying the fees yourself so that they are met by the local authority.
Can you avoid paying for care by giving away your assets?
Often, people who have income above the local authority's means test think about giving money, property, or other assets away to family or friends, or spending more than normal, so that their assets fall below the means test limit. However, when you apply for the means test to take place, the local authority can look back at your finances and consider whether you have made these gifts deliberately, to avoid paying for your care fees. This is known as deprivation of assets.
What is deprivation of assets?
Local authorities use the term ‘deprivation of assets’ when they believe someone has made a gift or transfer of assets to a third party, usually a relative, to avoid or reduce their liability to pay for care.
Can you be prosecuted for deprivation of assets?
Where the local authority considers that a deprivation of assets has occurred, they may include the value of those assets within the means test even though you no longer have them. This could of course mean that you become ineligible for funding, although your assets are actually below the means test limits. Additionally, if you transfer any assets to other people, they may become liable for some of the costs of your care.
Find out more
We often find that clients are unaware of the deprivation of assets rules and how to navigate them. If you or a loved one anticipate the need for care in the near future and would like advice on care funding and the deprivation of assets rules, please contact our specialist later life planning team who will be more than happy to help.
