published in The Law Society,
08 November 2018
As the cost of care rises, more and more people are attempting to safeguard their assets to avoid paying for it. But should we not start to consider care homes as an asset in themselves, and worth paying for, asks Helen Cowan
As a nurse in a care home, I have come to learn how asset protection is a type of financial planning designed to protect one’s assets from the cost of care home fees. Over the years, I have overheard many discussions of gifts being made and trusts set up with the aim of ringfencing savings and property for family members.
The language used in public discourse to describe paying for care is invariably hostile and unfriendly. Nursing homes are said to ‘devour’ assets and ‘wipe out’ savings; much is made of the ‘threat’ posed by the ‘ruinous’ cost of long-term care. Even the term ‘asset protection’ can cause us care home staff to feel that we are taking money where we don’t deserve it. We are already much maligned in the media – accounts of abuse regularly hit the headlines, but cases of compassion rarely do. Complaints about the cost of care further threaten the morale of staff doing an honest job.
So why the hostility towards care home fees, when the service we offer needs paying for? As a nation, we happily pay for holidays, homes, technology, transport and fine foods. Less welcome are the bills for council tax, home insurance and utilities, yet we pay them nonetheless, since there is no alternative. Could we not apply the same thinking to care home fees, paying them because we have to (though value for money is vital), and even because we are happy to? Can we not begin to consider care homes as an asset in themselves?
Here are a few truths around care homes it’s worth considering.
The inconvenient truth
Councils are facing a huge shortfall in their social care budgets. Lord Porter, chairman of the Local Government Association, predicts an annual social care funding gap of £2.3bn by 2020. There’s simply not enough money to pay for everyone’s care home fees – and with the number of people aged over 85 expected to double over the next 20 years (thanks to an NHS that can now treat 60,000 different conditions, offer 4,000 procedures and prescribe 6,000 drugs), the individual’s own financial contributions are becoming increasingly important.
While being grateful for longer life, your client may have to forget the fantasy of passing on their house to their children – it’s more likely as time goes on that their nest egg will be needed to pay for their care in later life. Many don’t want to acknowledge this, but it’s true. Bronwen Maddox, director of the Institute for Government, has urged politicians to work out a way to ‘persuade those fortunate enough to have assets that the best – indeed necessary – use of them is in providing for the last years of their own lives. The alternative is that a younger generation who will find it hard to build up assets will be supporting an older one that has far more’.
The uncomfortable truth
Your client might have to contribute to their care home fees, while the person in the next room doesn’t because they can’t afford to. It can seem unfair: your client may have worked hard and saved sensibly and may, understandably, feel penalised for their prudence.
While a cap on care home costs makes sense, gratitude for the life we’ve been enabled to lead and a willingness to contribute financially are helpful when preparing for the move into care. Once there, we will see that ageing and illness have a habit of making everyone equal in some ways anyway – and death is the ultimate leveller. As a nurse, I have seen that when the masks of wealth, status or ability are removed, it can be immensely liberating, as people begin to communicate and interact as pieces of a continent, not existing as islands entire of themselves. Resilience in older age is found less within individuals living alone, and more between individuals where their lives are shared with others.
The role of any nurse is to care for those less able to help themselves; that there can be a similar exchange between care home residents is profound. In the first century BC, Cicero said ‘Not for ourselves alone are we born’. If those words can motivate contributions to care fees from those who can afford it, the benefits will be enjoyed by everyone.
Truths to treasure
Where clients are looking to protect their assets, they would do well to remember that care homes, when they work well, can be an asset in themselves.
Your client may lose their mobility, memory, continence and eyesight as they age; they may have significant medical history and multiple comorbidities. They will need another human to care for them. They will also need company: loneliness is at epidemic proportions amongst the elderly, and studies show it to be as harmful to health as obesity, smoking and high blood pressure.
In some cases, a family member may provide care. Sometimes, though, this cost is too high – financially, physically and emotionally. A care home then comes into its own and can be seen as an asset.