Residents are required to meet the cost of care from their own assets until they have exhausted all but £23,250 of capital; the State will then take responsibility for funding care.
Establishing the assets relevant for this means test is key in determining where the burden of care funding lies and at what point it shifts from the resident to the State.
I recently received an instruction which demonstrated this point.
Mr Day went into care in 2010.
His financial assessment included £100,000 attributable to a plot of land that had been conveyed to Mr Day alone in 1960.
When we reviewed the couple’s affairs we found that the conveyance of the land to Mr Day alone was not a true representation of the real ownership arrangement.
In 1960 the land had been purchased with the proceeds of the Day’s joint farming enterprise. The couple then farmed the land in partnership. When parts were subsequently sold off the proceeds were paid into a joint account and used to repay a joint mortgage.
We were able to demonstrate that the land was not an asset of Mr Day’s alone; it was held in trust for himself and his wife, equally. Because there was no ready market for the purchase of Mr Day’s fractional share of the land the true value of his interest for the purposes of the means test diminished to nil.
Ownership arrangements are critical in ascertaining the value available for the means test but the bare evidence of the property deeds does not necessarily hold the final word.
If in doubt, take advice.