Wills, Lasting Power Of Attorney, And Care Home Costs Explained

Pauline Cichy, Director of Care and Governance at Oakland Care, and Nino Caffaro, a qualified private client solicitor with expertise in inheritance tax, probate, and a wealth of care sector knowledge, explain how to get your finances and affairs in order before it’s too late.

Care Home Costs 

The true cost of care can often come as a shock to families when they first face the prospect of a family member going into a care home.

However, it’s not just up to families to front the cost; there are multiple funding streams available, including private funding, local authority funding, nursing contribution, and continuing healthcare funding. 

Funding care can be extremely costly for families, with entry-level care home stays starting around £1,000 per week for residents with minimal healthcare needs.

Local authority funding is available to some, but it is limited in scope and availability. Similarly, Continuing Healthcare Funding should be available for those with nursing needs but, as with local authority funding, it is extremely difficult to obtain.

Funding for nursing recently increased to £200 per week, but this only covers a small fraction of the total care costs.

Unfortunately, funding does not cover those with dementia, creating a significant financial burden for families. 

Property and Asset Protection Strategies

One of the ways people pay for care is by selling their family member’s home if they are going into a care home full-time. However, equity release mortgages and annuity products are available as alternatives to selling their property outright.

If the person receiving care is living with a partner aged over 60 who will remain in the home, the property is typically disregarded in a financial assessment, allowing for more government assistance.

Nino recommends speaking to a qualified financial advisor before making any big decisions on selling property. A consultation will allow you to explore all of the available funding options before considering a property sale.

Requirements for Wills and Legal Documentation  

People often think having a Will is only for the elderly or very wealthy, but solicitor Nino Caffaro suggests it’s never too early to make a Will, and you can do one from age 18 onwards.

If a person passes away without having made a Will, the legal process will distribute assets, and not always to the individual’s wishes, which can often impact unmarried couples and parents especially.

Without a Will in place, unmarried partners receive absolutely nothing, regardless of how long the couple had been together.

If you have children under the age of 18, having a Will with a guardianship clause in your Will allows you to choose who is responsible for your child(ren) should both parents pass away.

A simple Will costs just a few hundred pounds, but can prevent hundreds of thousands being spent in litigation costs.

Mental Capacity, Legal Documents, and Power of Attorney 

Wills can only be made if the person has mental capacity and can sign it on behalf of themselves and understand what is being written in the Will.

The Court of Protection can approve statutory Wills, a Will created on behalf of someone who lacks the mental capacity to make one themselves, but the process can be expensive and reactive rather than preventive. 

The Mental Capacity Act sets a capacity test for appointing Lasting Powers of Attorney; it has similar, but less strict, requirements than a Will.

There are two types of Lasting Powers of Attorney: Property and Financial Affairs, and Health and Welfare Decisions.

The documents specify who is able to make decisions on behalf of a person, and how they’re made if that person loses the capacity to speak and act on their own behalf.

A Lasting Power of Attorney (LPA) must be appointed and registered with the Office of Public Guardian and sits dormant, like an insurance policy, until it’s needed. 

There is a registration fee of £92 per LPA, and solicitor fees can range from a few hundred to several hundred pounds, depending on the complexity of the situation.

If an applicant earns less than £12k per annum, they can apply for a reduction and if they are on certain benefits they can apply for an exemption.

It is recommended that a Lasting Power of Attorney should be created as young as possible, ideally from the age of 18 onwards, but they can be created any time before a person loses capacity.

It’s recommended to have multiple attorneys as joint or substitute arrangements if the primary attorney is unavailable or unable to take on the responsibility. 

Writing a Will and appointing a Power of Attorney is not just for the elderly; having an LPA could be needed at any time in the event of an accident, coma, cancer, or a car crash, which can affect people of any age!

To find out more about how you can protect your assets when going into care, contact our helpful team today, who can discuss your options with you. 

You can listen to our full podcast with Pauline and Nino here. 

Apply for a Lasting Power of Attorney here.