Parents taking drastic measures to protect their children’s inheritance

family group

A shocking report by the Times has revealed that couples are using legal documents to indicate that they would rather die than see their children’s inheritance dwindle away on care home fees.

The story, a collaborative effort between four of the Time’s political journalists, details how people are using Lasting Power of Attorney documents to refuse life saving treatment should they become incapacitated.

The number of people making a Lasting Power of Attorney rose from 228,236 in 2012 to 358,683 in 2014, with the Office of Public Guardian reporting an overwhelming 193,209 applications up to 22nd May 2015.

Care costs and lack of funding

Funding for care is available through the NHS Continuing Healthcare scheme, regardless of a person’s assets or income – but the system is complex and few applications are accepted. Funding is also available if a person has few assets but Local Authorities will often perform a means test first, without considering whether a person is eligible under the Continuing Healthcare scheme.

If the person has not made a successful application under the NHS Continuing Healthcare scheme and they have £23,250 or more in assets, they will have to fund the full cost of care costs themselves. Once their savings deplete to the £23,250 limit, the Local Authority will make a contribution to the costs – and once they reach the lower £14,250 limit, the Local Authority will take over the payments. With typical annual costs amounting to £29,250 for residential care or £39,300+ where nursing is required (source: PayingForCare), a couple’s hard earned savings can quickly be depleted in a few short years.

Two in five care home residents (41%) are now paying the full cost of their own care — an increase of almost a third (28.5%) in ten years, according to Age UK. However, among those who do receive full funding, almost 50,000 people are being forced to pay ‘top up fees’ because the Local Authority is not covering the full cost of care. These add-on charges have doubled or trebled in the past year with fees ranging £25 and £100 a week, according to Business Analyst LaingBuisson.

Care homes are also making up the shortfall by charging self-funding residents over £200 more per week than the amount the Local Authority pays for exactly the same room.

Refusal of treatment

Paul Gotch from Manchester law firm JMW Solicitors told the Times that almost all Lasting Power of Attorney documents the firm had prepared in the past year for clients had reflected the view that they did not want to be a financial burden on relatives. The most common theme was that they wanted to refuse life sustaining treatment so that the cost of care did not reduce the amount they could pass on to their families. Mr Gotch concluded:

“It amounts to a declaration that they would rather end their lives than become a financial burden to their loved ones.”

A Lasting Power of Attorney is not a direction to end a life by withdrawing treatment – rather it is a way for people to detail their preferences and instructions regarding life-sustaining treatment and other matters of health, care and finances in a legal document. There are other, less drastic, ways to protect your children’s inheritance from care fees, as explained below.

The state of care

Julia Abrey from London law firm Withers believes that there are other reasons why people are choosing to refuse life sustaining treatment. She told the Times:

“The primary driver is that the donor doesn’t wish to live on in unremitting pain or with any other poor quality of life.”

Last week, Andrea Sutcliffe, Chief Inspector of Adult Social Care at the Care Quality Commission, said that too many care facilities failed “the mum test”. Ms Sutcliffe explained:

“It’s about saying, ‘Is this a service that I would be happy for somebody I love and care about to use?”

Almost a third of services inspected by the Commission were rated either “requires improvement” or “inadequate”, with almost a quarter failing to improve after receiving a warning last year, and some getting worse.

Ms Sutcliffe notes:

“My inspectors have reported instances of people providing food, but just leaving it there, out of reach of somebody who needed assistance to eat. That’s not acceptable at all.”

She goes on to say,

“An older person’s skin needs to be looked after properly. If they are bed-bound or sat in a wheelchair, they need to be moved to make sure they are not putting pressure in particular areas constantly all through the day. If you’ve not got enough staff to make sure that people are moving, then that’s a real problem.”

A further problem identified by the Commission was a lack of stimulation for care home residents.

“People sat around in a room with the TV blaring and nothing else going on — you wouldn’t necessarily say that’s neglect or it’s cruelty but, actually, it’s not a good life.”

With drastic cuts to funding fueling the falling standards, many people dread the idea of having to go into residential care.

How a Lasting Power of Attorney works

There are two types of Lasting Power of Attorney: one relates to financial decisions and the other relates to health and care decisions. Nearly all of April King Legal’s clients make both types. If you lose mental capacity and you don’t have these documents in place, a friend or relative would have to apply for a Deputyship Order to be able to make decisions for you. This can cost thousands and take a significant amount of time to organise.

The Lasting Power of Attorney documents allow you to nominate someone you trust to make decisions for you, should you lose ‘mental capacity’ and therefore not be able to make decisions for yourself. This can happen at any time during a person’s lifetime and may be as a result of dementia, a brain injury or life threatening illness.

The financial decisions Lasting power of Attorney can be used as soon as it has been registered, with your permission. The health and care decisions Lasting Power of Attorney can only be used if you lose mental capacity.

At Section 5 of the heath and care decisions Lasting Power of Attorney you can decide whether or not to give your attorneys the authority to give or refuse consent to life sustaining treatment on your behalf. This might include, for example, cardiac resuscitation after a heart attack, a blood transfusion or medication.

You can also give your attorneys ‘preferences’ and ‘instructions’ at Section 7 of the form. An example of a preference is:

“I’d like to have regular haircuts, manicures and pedicures.”

An example of an instruction is:

“My attorneys must not consent to any medical treatment involving blood products, as this is against my religion.”

Preferences are not binding on your attorneys, but they must follow any instructions you give them. You might, for example, wish to refuse life-sustaining treatment in particular circumstances:

“My attorneys must not agree to life-sustaining treatment if I am in a persistent vegetative state.”

It is important to appreciate that the health and care LPA would only be used in the event that you did not have the mental capacity to make a particular decision for yourself. The financial decisions LPA can be used once registered, but only with your permission.

April King Legal can offer advice and prepare a Lasting Power of Attorney for you – call us on 0800 788 0500 or email to make an appointment at your nearest office. We also offer home visits where this is more convenient.

Protecting your assets

Whilst refusing life sustaining treatment to preserve your children’s inheritance might seem extreme, there are simpler ways to protect what you pass on to your loved ones – but couples need to act now.

Provided that the family home is held as ‘tenants in common’, couples can leave their share in trust to their partner for life, and then to their children. Should your partner need care after your death and not be entitled to funding, the Local Authority cannot take your share of the home for care fees as it is not owned by your partner.

 “The important factor is that couples need to act in advance. Once one party dies or loses mental capacity, through a stroke for example, then they are no longer in a position to do this legitimate and straightforward type of planning. It is therefore important for couples to act now even if they may not foresee care fees being an issue.”

Paul goes on to explain a further important point. Most clients he sees are surprised to learn that remarriage usually cancels a Will and makes the new spouse next in line to inherit, ahead of their own children! Protecting your half of the house in this way, he suggests, ensures that your children ultimately inherit when the survivor dies.

Speak to us about using a trust to protect your home from care fees – call us on 0800 788 0500 or email to make an appointment at your nearest office or arrange a home visit, without obligation.

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