I've been told that if I put my house, assets and investments into a Trust, and at a later date, have to go into a residential/nursing home, the value of these cannot be taken into account when calculating how much I would have to pay towards the care home fees, as they effectively don’t belong to me. Is this the case?
As regards to paying for care, there is certainly no guarantee that transferring a property into a trust would not be treated by the local authority as deliberate deprivation of assets to avoid paying for care. When conducting the means test for care, Local authorities will normally ask the question “Have you ever owned a property?” If the answer is “Yes” they will want to know what happened to it and the reasons for disposing of it. If it was found to be to avoid paying for care then they will apply the deprivation of assets rules. There is no time limit as to how far back the council can go to find out if assets have been given away to avoid paying for care. If this is found to be the case, the council can then treat you as if you still had the asset. This is termed having ‘notional capital’ and you would not receive any local authority support until you had paid for enough care so that notional capital were to notionally deplete to the means test limit. If the transfer was within six months of the person needing care then the council can recover the cost of the care from the person(s) who received the gift. The same would apply to investments if they were identified.
You must also consider that if you did get away with it, and had to rely on the care provided by your Social Services Department, your choice of care home would be very much restricted to what the Local Authority is prepared to pay. This may not be what you would have otherwise wished for or chosen if you were paying for yourself. If you did need to enter a care home, even if you have to pay for yourself, there is still some state support you can get and there are specifically designed care plans which can be purchased to meet the cost that may only use up part of your capital. Call FirstStop Advice 0800 377 70 70 and ask for Factsheet 1 Self-funding a Care Home
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