DWP Can Recover Benefit Overpayments From A Person’s Estate
Deliberate Deprivation

Beware – Schemes to Avoid Care Costs Can Be Seen as Deprivation of Assets

14 November, 2017 3 minutes reading time


The average annual cost of nursing care is over £40,000. So, schemes that aim to avoid selling your home to fund care fees are big business. But be careful; if you take this route, you could be accused of deliberate deprivation.

Funding Care

If you or your loved one reaches the point of needing residential or nursing care, a financial assessment will be carried out by your local authority. They will need a complete list of assets. This includes your property, investments, cash, and income at the point you enter care. You will only qualify for financial help from your local authority if your assets are worth less than £23,250 (in England).

Understandably, elderly people fear having to sell their homes. They prefer to pass it on to their children. So, schemes that will put your house in trust to keep it out of the local authority’s clutches are very tempting.

Unregulated Practice

Anxiety over the cost of care remains at the top of everyone’s list. Consequently, marketing these ‘products’, mainly as Asset Protection Trusts, Family Protection Trusts or Estate Preservation Trusts, continues to grow. But be warned. Some providers are not legally qualified, invariably employ high-pressure tactics and often charge high sign-up fees.

Indeed, eight unqualified (and unscrupulous) so-called lawyers were sentenced for fraudulent trading, scamming over £500,000 in up-front fees from elderly clients in return for bogus asset protection trusts. Read more.

Asset Trusts – Too Good To Be True?

So, what’s the rub? Providers claim that ring-fencing your estate in an “Asset Protection Trust” shelters the property from being included when a local authority determines how much they should contribute to their care fees.

It’s true; an Asset Protection Trust will put your home in a trust for someone else. However, if the main reason for signing over your property is to avoid paying for care, then the local authority can (and is likely to) challenge it as “deliberate deprivation”.

Deliberate Deprivation

It’s fair to say that when Local Authorities make your pre-care assessment, they’re too aware of common avoidance tactics. When they discover your property has been transferred, they will look closely at its motivation. If it’s evident that you are trying to protect your house and avoid paying care home fees, it will more than likely be deemed a clear deprivation of assets. This is not allowed.

Getting It Right

Of course, not all disposals of assets are necessarily deliberate deprivation. The issue is basically about intention.

If you or your loved one is considering gifting any assets, particularly the transfer of a property, you should seek legal advice to ensure it’s done correctly. Please contact us. We’re here to help.

Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.

Partnerships & Accreditations
Member of the World Association of Notaries Certified Cyber Essentials