Deprivation of Capital
With current economic uncertainty, we may all be concerned about what the future holds for us in terms of employment, pensions, investments, savings etc. The best way to deflect or minimise this added stress is to take control of your circumstances with a view to ensure that you are looked after, but also that your children/loved ones are provided for when you are no longer around.
You may come across websites where legal advisors seem to support the notion that you can knowingly deprive yourself of capital to avoid the costs of care fees. The truth of the matter is that you need to be very careful that this is not your intention.
You may be left under the impression that you can enter into certain arrangements, including wills, that have as the intention the removal of property from your estate for the purposes of public funding. This is not permitted by law. This should be distinguished from an opportunity to preserve capital for the next generation.
While you are completely within your right to give gifts to your loved ones, at any point in your life, you must be mindful of reducing the estate to such an extent that you could be accused of deprivation of capital, if you were ever assessed for public care funding.
Age UK has a helpful guide here.
If the council conclude that you have made deliberate efforts to deprive your estate of the means to pay care fees and funeral costs, they reserve the right to calculate your fees as if the estate had remained at its original value which could be a huge problem if the reduction has occurred through the giving of cash gifts, and those gifts have already been spent.
Our best advice for keeping your assets safe and ensuring that your beneficiaries are suitably taken care of, is to create a will in keeping with the expected standards and which does not leave you open to will disputes. A will is an important and legally binding document and it is essential that it is treated as such by clients, but more importantly, by the solicitor responsible.