When people need to go into care, the local councils that end up supporting the care costs are well known for their doggedness in attempting to ensure that the person being cared for supplies as much of the funding as possible.
This will often involve a review of how they managed their finances prior to their need for care and, in particular, whether they acted in a way that was intended to remove assets from their estate or control so that the council would pick up a greater proportion of the total care cost than would otherwise have been the case.
Where such 'deliberate deprivation' is alleged to have occurred, the council will seek recompense based on the capital that has been given away. Accordingly, if you intend to make substantial gifts of capital to family members or others, this should be considered early – preferably well before any residential care need arises. Additionally, a gift that is made more than seven years before death will normally not be considered to be within your estate when the eventual Inheritance Tax liability is calculated.
In a recent case, a family was successful in overturning a decision by a local council that deliberate deprivation was behind an elderly couple's gift of funds to one of their children in order for her to buy a house. The couple had, since the 1980s, given help to three of their children to buy homes. The husband, who suffers from dementia and Parkinson's disease, was placed in a nursing home soon after he and his wife had given financial support to their fourth child to buy a property with her husband.
The council decided, without providing the wife with 'a properly reasoned decision showing the evidence it has considered in accordance with statutory guidance', that the couple should carry the full cost of the husband's care.
The family complained to the Local Authority Ombudsman, who upheld their complaint that the council had not taken all relevant facts into account, including the couple's desire to be fair to all their children as evidenced by their prior course of action over some time, or provided the couple with the reasons for its decision. The council was ordered to apologise and pay the wife £250 for her distress.