Care fees and the manifesto – our view

Care fees
Since the Conservatives published their Manifesto, some of our clients and prospective clients have asked us how the care fee proposals relate to the Care Fee Trust Wills that we offer.

Current situation

Currently, if you die leaving everything to your partner and your partner needs care, the Local Authority will perform a means test on your partner to see if they can afford to pay for care.

  • If your partner has £23,250 or more of assets (including the value of the family home), your partner will be expected to pay for their care fees in full.
  • If your partner has between £14,250 and £23,250 (including the value of the family home), your partner will be expected to pay a proportion of their care fees with the Local Authority also making a contribution.
  • If your partner has less than £14,250 in assets, the Local Authority will pay for their care – although often your partner/their family will still be asked to pay a small contribution.

When performing a means test, the Local Authority can take all of the assets into account – including your share which you left to your partner.

How do April King Legal’s Care Fee Trust Will change this?

With a Care Fee Trust Will, if you die and your partner needs care, the Local Authority will still perform a means test, but they cannot take your share of the family wealth into account. This is because your partner will only have a ‘life interest’ in your share (i.e. they can use it during their lifetime) – they will not own it outright. After their death, your share of the family wealth passes in accordance with your Will – for example, to children/grandchildren or into a special type of Will to ensure it does not pass outside of the family.

What will happen after the General Election?

Regardless of who wins the Election on June 8th, the above will not change in the short term.

In the long term, if the Conservatives win, they have proposed that you will be asked to pay for the cost of your care if your assets are above £100,000. It will take some time for this to be brought into force but if it does come into force, your assets are still very much at risk.

For example, say your home is worth £200,000 and you die leaving everything to your partner .

  • WITHOUT a Care Fee Trust Will, your partner would have to pay up to £100,000 towards the cost of their care.
  • WITH a Care Fee Trust Will, your partner would have to pay for £0 towards the cost of their care.

Residential care fees range from £32,812 to £47,840 a year on average, depending on your region.

Will there be a cap on care fees?

The Conservatives previously proposed a cap of £72,000 on the amount you would pay towards care. This has now been scrapped because the Government says it is unsustainable. Theresa May has said there will be a consultation in October regarding an ‘absolute limit’ on the amount you will pay. Given that £72,000 is unsustainable, we can expect the ‘absolute limit’ to be much higher.

We do not know what the ‘absolute limit’ will be (if indeed one is introduced) but if for example the absolute limit was £100,000, assuming your home is worth £200,000, you die and leave everything to your partner:

  • WITH a Care Fee Trust Will, your partner would have to pay for £0 towards the cost of their care.
  • WITHOUT a Care Fee Trust Will, your partner would still have to pay up to £100,000 towards the cost of their care (depending on the cost of the care).

Summary:

In short, you should not delay in making a Care Fee Trust Will. Without a Care Fee Trust Will:

  • If the Conservative’s proposals are not implemented, you and your partner’s entire estate could be lost on care fees, up to the £14,250 lower limit.
  • If the Conservative’s current proposals are implemented at some point in the future (keeping in mind this could be several years away and may never happen), only £100,000 of you and your partner’s estate will be safe from care fees, with the rest at risk.

Request our free info pack on protecting your home from care fees.

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