Whilst it is always worth taking legal advice before making significant financial decisions, it is even more important when you also receive care and support. If you give away your assets, with the aim of reducing the amount you pay in care fees, your Local Authority may decide that you have intentionally deprived yourself of the means to pay, placing your care provision at risk and those who have benefited from your gifts under extreme financial pressures.
As part of their financial assessment process, a Local Authority will review your savings, capital, income and expenditure. This includes considering whether any gifts or transfers that have been made are deprivation of assets. Contrary to popular belief there is no seven-year time limit (that relates to inheritance tax) after which you will be ‘protected’ – Local Authorities have powers to investigate potential deprivation, which in these cash strapped times are used more that you might think.
In the event a Local Authority decides that you have deliberately deprived yourself of an asset, they have power to seek to recover funds from those who have benefited from your gift. They can also regard you as still owning the asset and therefore may not provide the financial support for care that you need.
If you have any queries regarding deprivation of assets, please seek advice first before making any gifts or transfers. It may well be what you are wanting to achieve can be tackled in another way such as within your will. Please contact our specialist team on 01926 491181.