Legal and Financial Strategies to Consider when Preparing for Long Term Care

Planning for long-term care is essential, particularly as life expectancy rises and healthcare costs increase. There are many reasons why it’s important to put a plan in place, especially for those who wish to protect their assets, maintain independence, and ensure their family’s future is secured.

If you or a family member are faced with decisions regarding care, our team of solicitors here at RDC has plenty of experience providing our clients with proactive advice not only on the financial aspects, but the other implications of long-term care. For example, many clients want to protect the value of their estate in the event of them needing care. Although it is not always possible to do this due to rules regarding the deliberate deprivation of assets, but there are some steps that can be taken. This article gives a brief overview of legal and financial strategies to consider when preparing for long term care.  

Assessing Your Long-Term Care Needs

Before delving into specific legal and financial measures, it’s essential to consider what your long-term care needs might look like. This may involve assessing your health, family situation, and financial resources. Many people prefer to stay in their homes for as long as possible, which can impact the kind of support they might require, such as home modifications or in-home carers. For others, residential care or supported living may become necessary at some point. Once you have a sense of your potential needs, you can better plan for the financial and legal aspects.

Set Up a Lasting Power of Attorney (LPA)

A Lasting Power of Attorney (LPA) is a critical document in any long-term care plan. This document enables you to appoint someone you trust (often referred to as your “attorney”) to make decisions on your behalf if you become unable to do so. There are two types of LPA: one covering property and financial affairs, and the other covering health and welfare.

For long-term care, an LPA for health and welfare can give your attorney the authority to make decisions about your care arrangements, including where you might live and what type of care you receive. Without an LPA, family members may face challenges in making these decisions for you, potentially having to apply to the Court of Protection, which can be time-consuming and expensive. Setting up an LPA is a good step to take in preparation, and provides clarity and peace of mind for you and your loved ones.

Wills and Trusts

Ensuring you have an up-to-date will is important. A will allows you to designate how your assets are distributed upon your death, therefore minimising the risk of family disputes and ensuring that your wishes are followed. However, a will alone may not be enough to protect assets from the cost of long-term care.

Establishing certain types of trusts can help safeguard your assets. For instance, a property protection trust can be used to preserve a share of your home for your beneficiaries, which could be beneficial if you need residential care later in life. By transferring a portion of your home or other assets into a trust, you may be able to reduce the amount the local authority could consider for funding your care. However, it’s important to consult with a solicitor, as these trusts can be complex, and there are strict rules around “deprivation of assets” that could impact eligibility for local authority support.

Understanding the Costs of Care

Care costs in the UK vary widely depending on the type of care and location. The average cost of residential care can be anything between £30,000 and £50,000 per year, while nursing care may be even higher. It’s essential to understand these costs early on to estimate what financial resources you may need and what contributions the local authority might make.

Under current UK regulations, if your assets exceed £23,250 (in England), you are required to fund your own care. Below this threshold, the local authority may contribute, although your income will still be assessed. Different thresholds and rules apply in Scotland, Wales, and Northern Ireland, so it’s important to consult a professional for specific guidance based on your location.

Seek Local Authority Support and Benefits

Depending on your financial situation, you may be eligible for local authority support or certain benefits that can help with the cost of care. For instance, Attendance Allowance is a benefit for people over the age of 65 who need assistance due to a physical or mental disability. For those under 65, the Personal Independence Payment (PIP) may be available.

Additionally, if your care needs are primarily health-related, you may qualify for NHS Continuing Healthcare (CHC), which covers the full cost of care. However, eligibility assessments for CHC are stringent, and it’s wise to seek guidance from a professional to understand if you may qualify.

Regularly Review Your Plan

Lastly, it’s essential to review your long-term care plan regularly. Personal circumstances, financial conditions, and UK regulations around care can all change over time. Regular reviews with your solicitor and financial adviser ensure that your plan remains relevant and that your loved ones understand your wishes.

Planning for the Future

Here at RDC, we believe that it is never too early to plan for the future. Our team of solicitors understands how difficult it can be to contemplate and make decisions about your own and your family’s future; we’re here to help guide you through the options. Please don't hesitate to reach out to our team for expert guidance and support by calling RDC Solicitors today on Bingley 01274 723858, Ilkley 01943 601173 or Bradford 01274 735511.