Elephant in very many rooms
Helping clients plan for care costs for elderly family members presents an opportunity for high street solicitors
Those of us living in the UK for the past 50 years or so have witnessed a truly extraordinary transformation in the lives of most of us – effectively caused by a revolution of scientific and medical advances.
As a result of this we will mostly live much longer than our parents, and our children will mostly live much longer than us.
A truly wonderful success story then – but with consequences too. More and more of us will manage conditions in our later years, and for many years. More and more of us will need care, and this will have to be paid for somehow.
Facing up to the issue
You don’t need to do much reading to find out the staggering costs we will face as a society in the future. And you don’t need to do much more reading to conclude perhaps that this is a problem most Scottish and UK politicians prefer to leave firmly on the back burner.
Families also, in my experience, often prefer not to contemplate care costs and how to meet them. “It won’t happen to us”, is the wishful thinking approach of many. Sadly it does happen to them – and will happen in ever increasing numbers. All things considered, it seems to me that paying for the care of a family member is going to be a pressing problem for more and more Scottish families in the coming decades.
In my view, this presents an opportunity for high street lawyers to help families. Local law firms should take the lead as family lawyers, and inform clients about care costs, how they can be met and how assets can be preserved – if that is what clients wish to do.
A starting point would be to mirror the increasing number of campaigns (some funded by the Scottish Government) to have clients and their families complete powers of attorney. Attorneys have a vital decision-taking role to play when care costs loom into view – since frequently incapacity is an issue then. Families also should know that taking financial and legal advice when care costs become an issue is vital – and firms should tell clients that. Without such advice, many families simply sleepwalk into selling a house.
We should be telling clients that the local authority cannot make you sell your house to pay for care. We should spread the word that, as a matter of course, local authorities are expected to inform families who qualify that an interest-free deferred payment arrangement is available to postpone care payments. Even if agreement cannot be reached over that, the authority only has recourse to taking a charge over the property, and cannot enforce a sale. Knowledge here gives clients and their families time to consider all options open to them.
Prior to care being in contemplation, though, clients in our experience will seek to take reasonable steps to preserve at least half of the house from a care assessment if so advised. Evacuation of special destinations, and will adjustment to ensure someone in care is less likely to inherit the house, are well understood by clients. Immediate care annuities seem to be almost unknown to many of the public, and we should be able to signpost our clients for relevant advice. Equity release can also have a part to play here. “Asset protection trusts” seem at least to the writer to have possibly been mis-sold by some parties as a care costs prevention device. Notwithstanding that, it remains the case that a discretionary family trust created for good and sufficient reasons not related to care costs, may have the side effect of taking a house out of a care assessment.
There is no “one size fits all” solution for care costs, and indeed different families take completely different approaches to them. What is undoubtedly true, however, is that the subject engages most older people and their adult children in a very significant way. Perhaps the commoditisation of conveyancing has reduced client loyalty to high street solicitors.
However, I believe that forward planning for families around care costs and related age issues is an area where a substantial relationship of choice can be rebuilt in our traditional client base. This can be achieved by proactive local solicitors familiar with all the issues involved and keen to engage with clients and communities. It is a chance we should work hard to take.
David Borrowman, Solicitors for Older People Scotland