Long Term Care Planning
An age-old problem
People are living longer than ever before and this means that many more may eventually need care in their old age.
A longer life however does not necessarily mean a healthier one as approximately half the population over 65 has a long standing illness.
With government figures indicating that a 65 year old woman will have a one in three chance of needing admission to a nursing home in later life the issues of long term care cannot be ignored.
Meeting the costs of long term care
There are several possible ways of funding long term care –
• Rely on the state
• Rely on your family
• Pay from income
• Re-organize your assets
• Sell your home
• Insure
Rely on the state
At one time it was safe to presume that the state would pay for the long term care of the elderly. Unfortunately this is not the case in many instances.
For those with assets less than £13,500 there may be help available via local authorities.
For those with assets between £13,000 and £23,350 some financial help may be available but only after a stringent means test.
Anyone with assets in excess of £22,350 (and that may well include the value of the family home) is expected to pay for their own care costs.
Rely on your family
This has long been seen as the way to care for older people. In fact three quarters of all care is usually provided by relatives and is largely unpaid but research is now indicating that elderly people are more anxious to avoid imposing on their families for care and support.
Pay from income
This may at first seem to be the answer but care home fees are now expensive quite often not making this a viable solution.
Re-organise your assets
Should you not be in a position to cover the cost of care from income, by careful re-organisation of any existing savings or investments, it may be possible to generate any extra income needed, in order to cover any shortfall. Should this prove successful, then more drastic measures may be avoided.
Sell your home
With so little financial help available, many people are forced to sell their homes to raise sufficient capital to pay for their care costs. At present 40,000 homes in the UK are sold every year in order to pay for long term care.
This sounds reasonable in principle but your home may be your most valued and treasured asset and you may wish to pass it on to your family. The property may also need to be retained because one spouse may continue to live there.
Insure
There are two types of long term care insurance available –
• Pre-funded insurance
There is still available a pre-funded option into which single or regular payments can be made until a monthly benefit is needed. The maximum age at entry is 75 next birthday.
• Immediate care
This option will provide immediate income for a single lump sum payment. One of these options if appropriate may:
- Protect your house, assets and savings from the cost of long term care
- Protect your planned legacies
- Provide a tax free income should you need long term care in your own home or a residential or nursing care home
With the correct advice and by choosing the option most suitable to your circumstances you can achieve two simple but reassuring things.
Firstly you can protect your home and assets from the devastating effects of long term care costs.
Secondly, and most equally important, you will have peace of mind knowing that should you ever need care your independence and dignity will be preserved.
Who can I turn to for advice?
Long term care planning requires a combination of advice and expertise from a number of different professionals not normally available together.
BHP Law however have a dedicated team which specifically focuses on areas of concern for the elderly and their families, including –
• Long Term Care Planning
• Asset Protection
• Wills including Living Wills
• Enduring Powers of Attorney
• Setting up Trusts
• Benefits
• Tax
