Nursing homes do cost a tremendous amount of money – often over $200 a day – so, eventually, a person may end up paying all of his money to the nursing home, if he lives long enough in the nursing home. But nursing homes, like apartment buildings, earn the rent over time.
The Asset Protection Trust, an irrevocable trust also called a house trust can protect their home and savings from being consumed by the cost of nursing home care. It is different than a revocable living trust.
The basic rule is that all your monthly income goes to the nursing home, and Medicaid then pays the nursing home the difference between your monthly income, and the amount that the nursing home is allowed under its Medicaid contract.
Going Into Care With Your House In Trust
The trouble with trust schemes is that if you put your property in trust, then go into a residential care home or a nursing home, your home is no longer owned by you - it is not part of your capital and cannot therefore be used to fund your care home fees.
If you're moving into residential care (such as a care home or nursing home), the value of your home will be included as part of your capital in the financial assessment. However, should you be receiving care in your own home, the assessment will not include the value of your home.
Steve Webb replies: Moving into a care home will not affect the amount of state pension someone receives, but receiving a state pension may affect the amount of help they get with meeting their care costs. This will depend on whether they are paying for the care themselves or if the place is publicly funded.
Your aunt won't necessarily have to sell her home to pay for her care – it depends on her circumstances. Her local authority will assess her finances to see how much of her care fees she must pay herself. There are situations where her property wouldn't be included in this financial assessment.
Obviously, it will be very hard for you to manage just on your own state pension, but the good news is that you are likely to be able to claim pension credit to top up your income. Once your husband moves permanently into a care home you will be assessed as if you were a single person, just on the basis of your income.
The Fair Deal scheme is managed by the Health Service Executive (HSE). Under Fair Deal, you pay a certain amount towards the cost of your care and the HSE pays the rest. Fair Deal covers approved private nursing homes, voluntary nursing homes and public nursing homes.
Your income should include any Department for Work and Pensions (DWP) benefits and pensions you receive. We don't take into account the first £14,250 of your capital. If you have savings of over £23,250, or you do not want to give us details of your finances, you will have to pay the full cost of your stay.
If the property is bought and is gifted immediately to the children there should be no gain to tax, provided there is no increase in value between the dates of purchase and gift. Where the property gifted was the donor's main home, Principal Private Residence relief (PPR) may exempt some or all of the gains from CGT.
The savings threshold for care homes or receiving support from local authorities will also change, and if you have capital between £20,000 and £100,000 you will receive some form of support. If you have less than £20,000, you will not have to pay for care from their assets but may have to contribute from their income.
The parent's property could be placed on the market and the sale proceeds used to fund their care if they are moving to a care home but only if no-one else is living in the property.
Always remember – you do not necessarily have to sell your house to pay for care! If you have a relative needing full time care, read this vital information on care fees and care funding – now. It will help you to: understand that you don't necessarily have to sell the house.
Legally, you are not obliged to pay for your family member's fees. Whether they are your mother or wife, blood relative or relative by law, unless you have any joint assets or contracts you are not financially involved in their care.
Local authorities will stop paying care homes fees on or for up to three days after the date of a care home resident's death, depending on their agreement with the care home. If there are unpaid, backdated fees, the local authority is still responsible for settling them.
However, to ensure you are charged the appropriate fees, it is recommended that you disclose this information to Centrelink as those assets and income may have an impact on your pension. For example, if you own your home and have a small amount of money outside of it, you could be considered a full pensioner.
Is my home considered an asset? Your home is not counted as an asset when calculating pension or payment, but it does affect how your pension or payment is assessed under the assets test. If you are a homeowner your asset value limit is lower than someone who does not own their residence.
A Refundable Accommodation Deposit (RAD) means you are paying for your Accommodation in Aged Care as a Lump sum. It is Government Guaranteed (so it is very safe) & fully Refundable.
The simple answer to this is you cannot simply give your money away. HOWEVER, there are some circumstances where it may be possible to give away your assets. This means that they are not included, by your local authority, in any calculation to determine the value of your capital when assessing nursing home costs.
If you have income above $73,453.12 or assets above $178,839.20, you will need to pay for the full cost of your accommodation, negotiated and agreed to with the aged care home. (You may still need to pay the full cost of your accommodation if your assets and/or income are less than these amounts.