What are the issues surrounding Care Costs?

The facts and figures:

 - 1 in 3 women currently go into care

 - 1 in 4 men currently go into care

 - 1 in 2 people could be in care in the near future due to our aging population

 - Average Care home fees cost between   £20,000 and £50,000 per annum

 - 70,000 people were forced to sell their home in 2006 to pay for Care Costs

   (Source: Guardian, 17^th November,  2007)

With this in mind, it is of little wonder that Care Costs have been an issue dominating the news and political agendas for the past few years. How much would you be willing to pay when you are forced to go into care? How much would you give up paying for that care? Would you give up your family home to pay for it?

Due to our aging population, more and more people are being forced to lose the majority of their estate to cover the cost of their care. Effectively, when care is confirmed, all your income is taken to pay for the care, with you still receiving free personal and nursing care at a rate of £227 per week but this is simply a contribution to your care. Any shortfall from this is where your capital is brought in to cover.

Though there are many ways of dealing with this situation effectively, there can be many hidden extra costs and situations which can seriously hamper the long term effectiveness and gain.

So what are the options available to protect my estate?

This is very common, but usually it is the worst thing to do – you lose control!

You can lose your home if the family member becomes bankrupt. If the family member owns their own home, they will need to pay Capital Gains Tax when sold.

 - Insurance Policy

Another costly and unsustainable option is to purchase an annuity or insurance policy. This would effectively entail, paying a large amount of money to an insurance company who will then pay the care costs.

 - Do nothing and hope you don’t go into care

This is a massive gamble and considering what is at stake, this is a colossal risk.

 - Use our Family Protection Plan

If you place your assets into the Trust at such times when you are hale and hearty with no care on the horizon, the assets contained in the Trust should be protected against Care Costs. Our Family Protection Trust however, is a multi-purpose product, in that it can combat many other potential dangers on your estate, including:

- Executry Costs

Tying up your estate on death can cost thousands of pounds, as well as take a very long time to conclude. With your assets in a Trust, there should be no Executry procedure required, meaning no cost or delay in winding up.

- Care Costs

Care Costs can be a massive cost and drain on someone’s estate. As often is the case, care is brought on when it is too late to mitigate the costs. The costs of this care is taken from your estate – depending on the length of time spent in care, this could deplete the majority of the estate.

- Legal Rights

Children can claim something called Legal Rights on the estate of their parents – this, by law, means on the death of the first parent and the death of the second, a sizeable share of the estate in that parents’ name can be claimed back. Assets included in the Trust are in the names of the Trustees and therefore are exempt from Legal Rights.

- Unreliable Children

It is not sensible to dispense a part of your estate to children if they have problems or shaky marriages. Debt, business problems, or children on state benefits, can lose inheritance or future benefits based on the size of income. In a Trust, the assets can remain after your death for future benefit.

- Incapacity

Our Family Protection Trust works out considerably cheaper than a Care Cost Plan, and holds many other important benefits. If you go into care, and haven’t properly planned for it, the inherent costings to you and your family could effectively wipe out the entire estate. An inability to deal with your affairs can cause massive problems, however if your assets are in a Trust, then the Trustees can continue to act on your behalf.

- Sideways Disinheritance

Countless families are divested every year. If you die, and your spouse remarries, then your estate can easily be inherited by someone else’s family. A Trust again, keeps your assets for those whom you wish to benefit.

Due to the nature of the Trust and the inherent benefits of it, we also include Wills and Powers of Attorney within the price of the Family Protection Trust.

The most important aspect of our Family Protection Trust is this: You remain in complete control throughout.