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How long will you need to be in Care? How much will it cost? Will your savings run out?
Case Studies
Care Home Funding
CASE STUDY 1
Mr and Mrs Brown, live in their own house, but
are receiving assistance from a live in carer. Mrs Brown is in her
early eighties and has had breast cancer (in remission). She also
suffers from Parkinsons which was diagnosed 10 years ago. Mr Brown
suffered a stroke 2 years ago, but is a little more mobile than his
wife.
Their investments totalled approximately just over £100,000. The
domiciliary agency was charging them £500 per week. The shortfall
(difference between their joint incomes living expenses and fees)
was over £11,700 per annum. Mr and Mrs Brown were therefore
extremely concerned that given current investment conditions, and
low interest rates their money would dwindle in a very few
years.
Our solution
As Mr Brown's income was much higher than his wife's, we felt that
it would be worthwhile investigating the possibility of a care fees
plan for Mrs Brown. The plan would guarantee to pay the selected
benefit for the rest of Mrs Brown's life. There is no obligation to
purchase a plan, and after receiving medical details from Mrs
Browm's doctor and a report from the nursing home, the four
providers of these plans completed their underwriting so that they
could offer Mrs Brown terms. The quotes ranged between £93,000 down
to £58,700 for providing an income of £11712 per annum, which
covered the shortfall. In addition the payments from the plan were
going to go up by the increase in the retail price index plus 2%.
Also by being paid direct to the care provider Mrs Brown's tax
position was completely unaffected. In short she was getting £11712
per annum totally tax free. (case study kindly supplied by Capital
Care)
CASE STUDY 2
Joyce, is almost 80 and currently enjoys her
stay in a residential home in London.
She is considerably wealthy, and has an income of over £1,700 per
month. Her Care fees are in excess of £3,000 per month. She
therefore requires an additional income of £1,300 to meet her fees
each month.
Because of the degree of wealth she has, she also has a
considerable Inheritance Tax problem, to be borne by her
grandchildren when she eventually dies.
With the skilful use of Trust planning we were able to provide an
income, tax free, from her investment portfolio, which met the
shortfall and immediately removed £118,800 from her estate. Should
she live another 7 years, the total removed from her estate would
reach £312,000, and she would still enjoy a continuing income. The
family has been saved a minimum of £124,800 in Inheritance Tax by
this single piece of planning at current tax rates. (case study
kindly supplied by Tailor Made Care Solutions)
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