Deprivation of Assets

It is well established that if a person deliberately deprives themselves of the benefit of an asset, for example by placing that asset in Trust for others during their lifetime, and then later makes an application for assistance with care funding, the Local Authority can take the value of that asset into account when making their assessment.

If a gift is made by a person at a time when they can reasonably expect to require care and support in the future, that gift is likely to be viewed as a “deliberate deprivation” of their assets. If the Local Authority does find that gift to have been a deliberate deprivation, the value of the gift is treated as being “notional capital” and therefore affects the person’s eligibility to receive funding.

There are of course many reasons people make gifts during their lifetime and seeking to avoid paying for their own nursing care may only be one of these reasons. For a deliberate deprivation to be found, avoiding care home charges does not need to be the main motive for making the gift but must be a significant one.

The Local Authority will consider many factors including the timing of the gift, the size of the gift and the motive behind the gift. They will also look at whether the person making the gift was ill or receiving care at the time the gift was made as in these circumstances it is very difficult to argue that the gift did not constitute a deliberate deprivation of assets.
For anyone considering ways in which to protect their assets or for those concerned about the impact of care fees on their estate, advice should be sought at an early stage to allow options to be considered.

If you would like advice on estate planning or care funding please contact us.