Stuart Maher, Director and Head of the Watson Ramsbottom Private Client Department looks at a case where a council believed an elderly woman had intentionally given away money to seek financial support for her care fees.
When care costs need to be met, simply giving away your money is not a strategy that normally meets with success, as the local authority is likely to contest such arrangements when calculating what it should contribute towards the costs.
In a recent case, a local council refused to meet the cost of an elderly woman’s care home fees when it learned that she had given sums of money to her family while in the home. In its view, this had been a deliberate attempt to avoid paying the costs herself.
When she was admitted to the home following a stroke in 2007, she had assets of approximately £250,000. Currently, anyone with assets of over £23,500 has to pay the full cost of their care.
Seven years later, the woman’s assets were depleted to the extent that her family applied for assistance from the council, which instituted a financial means assessment process to determine her eligibility for support. The council began paying for her care on a provisional basis pending the finalisation of the assessment.
In the course of the assessment process, it was revealed that she had given away an average of about £1,000 per month. She claimed that this had been recommended to her by an independent financial adviser and it was something she had done for some time prior to her stroke.
The council took the view that she had intentionally deprived herself of the capital needed to pay for her care and demanded repayment of the £7,000 it had paid up to that point. It also stopped paying her care home fees.
The Local Government and Social Care Ombudsman concluded that the council had decided without good cause that the woman’s gifts represented the intentional dissipation of her capital. The existence of an established pattern of giving before she went into the home was a key finding.
Stuart Maher, a Director and head of our private client department at Watson Ramsbottom comments, “Taking professional advice early can represent the difference between leaving your estate to your loved ones and having it reduced by care home costs or Inheritance Tax. We can advise you on all legal issues relating to the elderly.”
If you would like further advice on situations similar to the one in this article, please contact us on 01254 88 44 22 or complete our online enquiry form discuss your concerns with one of our team of expert advisors’.