Wills, Power of Attorney, and Trust Disputes

Navigating the care home charging system can become more complex when legal matters such as wills, powers of attorney, and trusts are involved. The Charging for Residential Accommodation Guide (CRAG) 2015 [1] provides specific guidance on how these situations are handled during the financial assessment.

The Role of a Will

A person's will only comes into effect after their death, so it does not directly impact the financial assessment for care home fees while they are alive. The assessment is based on the assets owned by the individual at the time they are receiving care. However, the contents of a will can sometimes be relevant in disputes over the ownership of property or other assets.

Power of Attorney

Appointing someone as an attorney under a Lasting Power of Attorney (LPA) or Enduring Power of Attorney (EPA) is a sensible step in planning for the future. However, it is important to understand what this means in the context of care home fees.

Financial Responsibility: An attorney is responsible for managing the resident's financial affairs, but they are not personally liable for the resident's care home fees. The fees must be paid from the resident's own income and capital.
No Change in Assessment: The existence of a power of attorney does not alter the financial assessment process. The resident's assets are assessed in exactly the same way, regardless of who is managing them.
Duty of the Attorney: The attorney has a legal duty to act in the best interests of the resident. This includes ensuring that their care home fees are paid correctly and that they are receiving all the benefits and allowances to which they are entitled.

Disputes with the Trust

Disputes can sometimes arise with the Health and Social Care (HSC) Trust over the financial assessment. Common areas of disagreement include:

Beneficial Ownership: There may be a dispute over who truly owns an asset. For example, a family member may have contributed to the purchase of a property, even if their name is not on the deeds. In such cases, the Trust must investigate the "beneficial ownership" of the asset, not just the legal ownership.
Valuation of Assets: A resident or their family may disagree with the Trust's valuation of a property or other asset.
Deprivation of Capital: The Trust may decide that a resident has deliberately deprived themselves of capital to reduce their care home fees, a decision which the resident may wish to challenge.

In the event of a dispute, it is important to seek advice. You have the right to ask the Trust for a written explanation of their decision and to make a formal complaint if you believe the assessment is incorrect.

How Trust Funds are Treated

The treatment of money held in a trust can be particularly complex. The key factor is the type of trust and the resident's entitlement to the funds within it.

Type of Trust	Treatment in Financial Assessment
Absolute Entitlement	If the resident has an absolute right to the income or capital of the trust, it will be included in the financial assessment.
Discretionary Trust	If the trustees have discretion over how and when payments are made, only the payments that are actually made to the resident will be counted as income. The capital remaining in the trust is not usually included in the assessment.
Personal Injury Trusts	Money held in a trust that derives from a personal injury compensation payment is often disregarded, but specific rules apply.

Given the complexities of trust law, it is highly advisable to seek specialist legal advice if a trust is involved.

References