Separate bank accounts to split assets for nursing home fees reasons

[didds]

My wife, in her professional capacity, deals with many elderly people who face moving into nursing homes etc.

Last week she was given some advice by a colleague who deals with such arrangements... advice was that married couples should really have separate bank accounts, including deposit style accounts, as otherwise joint accounts mean the entire contents of them will be counted towards nursing home fees etc .

That seems to fly in the face of advice gleaned from here about having joint accounts such that the money can be got at by the other partner when one dies, or becomes incapacitated.

As it is me and Mrs Didds have a cjoint current account which all the DDs go out of, and a joint depeosit style account for easy access rainy fund of a few grand. So really not much at all when push comes to shove. current account balance is rarely above 4K if that, and after a few bills is substantially less. having to have split bank accounts would be a pain, to put it mildly.


DAK what the situation is in reality?

didds

Moderator Message:
Moved from DAK to Legal Issues (Practical) leaving a link. - Chris

[Chrysalis]

This looks helpful:
https://www.ageuk.org.uk/globalassets/a ... er_fcs.pdf

[melonfool]

I think it's wrong, though some councils might try it:

https://www.telegraph.co.uk/pensions-re ... ifes-care/

Mel

[pochisoldi]

My wife, in her professional capacity, deals with many elderly people who face moving into nursing homes etc.

Last week she was given some advice by a colleague who deals with such arrangements... advice was that married couples should really have separate bank accounts, including deposit style accounts, as otherwise joint accounts mean the entire contents of them will be counted towards nursing home fees etc .

That seems to fly in the face of advice gleaned from here about having joint accounts such that the money can be got at by the other partner when one dies, or becomes incapacitated.

As it is me and Mrs Didds have a cjoint current account which all the DDs go out of, and a joint depeosit style account for easy access rainy fund of a few grand. So really not much at all when push comes to shove. current account balance is rarely above 4K if that, and after a few bills is substantially less. having to have split bank accounts would be a pain, to put it mildly.


DAK what the situation is in reality?

didds

I think it might make sense to have separate savings accounts holding savings above the joint funding limit, but a complete split of all accounts would be a pain in the backside, and would probably end up with the local authority alleging deliberately deprivation of assets in a case where one person needs care and the other doesn't.

[melonfool]

Not if you read the links, no.

Agree re savings, but that's for a different reason.

If one needs care and the other doesn't and everything is joint, they take account of 50%. Moving your own 50% to a different account couldn't trigger the "deliberate deprivation" rule, surely?

Mel

[didds]

If one needs care and the other doesn't and everything is joint, they take account of 50%. Moving your own 50% to a different account couldn't trigger the "deliberate deprivation" rule, surely?

Mel

That's what I'd hope Mel - because if not its effectively saying Mr A ends up with nothing to live on every month because Mrs A is in a home and the entire joint account is taken to pay for it.

Anybody any other info/insight?

didds

[didds]

I suppose the distinction is "what is a savings account" ?

If you've £100,000 in a joint current account...

didds

[Chrysalis]

Mel, what did you think was ‘wrong?’ I thought the AgeUK document looked well informed, and is more recent than the Telegraph article (but I also didn’t think the two sources were contradictory).
I must admit I did not know that the financial assessment for care costs was done on an individual basis (since pretty much everything else in the benefit system is done on a household basis).
My reading of both articles is that money held in joint accounts (I’m sure it matters not whether it’s called a savings account, a current account or even a brokers account) is generally assumed to be owned in equal shares. In the AgeUK example, it shows that even in that case, it might be beneficial to split the savings into sole accounts. If that is done 50/50 I don’t think that can be deprivation of assets (although see below). If it was done in a different manner, eg 90/10 in favour of the partner not needing care, then I suspect that they could argue deliberate deprivation, unless you could demonstrate that the funds were actually owned in that proportion (eg the 90% could be shown to come from an inheritance or other solely owned funds). In the Telegraph example they suggested that if you moved solely owned funds into a joint account, ie effectively giving half of them to your spouse or partner, then that could also be considered deliberate deprivation. I think it would depend on the timing and whether intent could be demonstrated.
There is some other interesting info in the AgeUK document, for example about splitting a private pension or annuity 50/50.

For the OP, is this something you are facing imminently? If not, I suggest just carry on as you are. It doesn’t look like there is an easy loophole you should be exploiting at this particular moment!

[melonfool]

I suppose the distinction is "what is a savings account" ?

If you've £100,000 in a joint current account...

didds

No, there is no need for that distinction - Pochisoldi was merely suggesting people not keep more than the FCA protection limit with any one bank (I think) so as to spread the risk (an important point actually, my parents recently told me they have £450k with Nationwide ).

Mel

[melonfool]

Jab2001 - it wasn't your post I was saying was wrong, it was the 'advice' in the OP, your post wasn't there when I started my reply.

Mel

[CryptoPlankton]

As it is me and Mrs Didds have a cjoint current account which all the DDs go out of, and a joint depeosit style account for easy access rainy fund of a few grand. So really not much at all when push comes to shove. current account balance is rarely above 4K if that, and after a few bills is substantially less. having to have split bank accounts would be a pain, to put it mildly.


DAK what the situation is in reality?

didds

If all other assets, savings and investments are held separately (apart from your home, which would be disregarded if one of you remained living there) then I really don't think you have a problem. The critical value is currently £14250 - assets below this are completely "safe". So, as you say you have a maximum of £4K in your joint current account, it would be fine to keep about £20k or so in your "rainy day" joint savings account without any problem as you would be treated as having £10k each. If it came to it, the only money the LA could demand would be the person in care's income (pension, and/or whatever else) and all other monies in these two accounts would be untouchable.

[melonfool]

The critical value is currently £14250 - assets below this are completely "safe". So, as you say you have a maximum of £4K in your joint current account, it would be fine to keep about £20k or so in your "rainy day" joint savings account without any problem as you would be treated as having £10k each. If it came to it, the only money the LA could demand would be the person in care's income (pension, and/or whatever else) and all other monies in these two accounts would be untouchable.

I think it's more than £14,250 now, according to the two links posted.

re the 'deliberate deprivation of assets', I'm pretty sure the council has to be able to show that you did this to avoid care home fees. Not for any other reason. So, first it has to be a 'deliberate deprivation of assets' (i.e. just getting rid of stuff on purpose) but then it *also* has to be to avoid the fees. Well, if you don't know if you will ever have fees, how could that be proven? OK, if you had literally just been told you are going to have to go into a home and you manage to change the ownership of your property into your son's name the day before - probably be an issue.

But if, in your perfectly healthy 70's, with enough money to live on, you give away any excess you feel you don't need (ignoring the IHT rules as they are not connected) then I cannot see how they can prove any link. If you get the god bug and decide that you must live in penury and the church must have all your money, then that's deliberate, but it's nothing to do with avoiding care home fees.

A mate of mine has put his mum's house in a trust run by him and his brother so it can't be snaffled by the council - he says he took legal advice, I must ask him what the advice was (obviously he did it, so that was the advice, but the premise), I said what about the council coming after it, he said they can in theory, but there is no case where they have ever done it. I suspect it's not worth their costs and time on balance. And the longer she doesn't need care, the 'safer' they are I think.

Mel

(Googled: https://www.ageuk.org.uk/information-ad ... f-assets/# )

[PinkDalek]

The critical value is currently £14250 - assets below this are completely "safe". …

I think it's more than £14,250 now, according to the two links posted. ...

Crypto's the critical value is currently £14250 represents the Lower Capital Limit and thus his completely "safe". The £23,250 I think you've seen is the Upper Capital Limit.

From, randomly, https://www.bournemouth.gov.uk/AdultSoc ... ments.aspx :

Lower Capital limit – this is currently set at £14,250 and this means if you have capital below this amount it will not be taken into account within the financial assessment.

Upper Capital Limit – this is currently set at £23,250. This means if you have capital above this figure the Council will not help towards the cost of your care.

If you have capital above £14,250 but below £23,250 then tariff income rules will apply. …

[PinkDalek]

… That seems to fly in the face of advice gleaned from here about having joint accounts such that the money can be got at by the other partner when one dies, or becomes incapacitate ...

I don't think the part above has been answered but it is a different issue to the one you raise. The idea there, at least in so far as joint bank accounts are concerned, is such that the survivor can access what becomes a sole account, without the need to obtain a Grant of Representation (aka Grant of Probate etc) if applicable.

[didds]

so basically if joint savings are < £28,500 it doesn't matter how they are held?

didds

[CryptoPlankton]

so basically if joint savings are < £28,500 it doesn't matter how they are held?

didds

That's right. As you are each deemed to have a half share of a joint account, if one of you uses up all individually held savings/assets then you will have reached the lower limit for having to make any contribution towards care (other than from income).

[didds]

so basically if joint savings are < £28,500 it doesn't matter how they are held?

didds

That's right. As you are each deemed to have a half share of a joint account, if one of you uses up all individually held savings/assets then you will have reached the lower limit for having to make any contribution towards care (other than from income).

cheers - and if you had £100,ooo in a joint account, that IS deemed to be 50K each, so 50K is "protected"for the other account holder anyway?

And there is no revisiting to make that 2 x 25K subsequently.

?? 9sanity check)

didds

[melonfool]

so basically if joint savings are < £28,500 it doesn't matter how they are held?

didds

That's right. As you are each deemed to have a half share of a joint account, if one of you uses up all individually held savings/assets then you will have reached the lower limit for having to make any contribution towards care (other than from income).

cheers - and if you had £100,ooo in a joint account, that IS deemed to be 50K each, so 50K is "protected"for the other account holder anyway?

And there is no revisiting to make that 2 x 25K subsequently.

?? 9sanity check)

didds

If you read the documents in the links - no, it is based on the proportion of the accounts you each 'own' which is generally assumed to be 50/50, but if you have evidence it is not then you need to keep that (e.g. the joint account is between a mother and daughter, 100% of the money is the mother's but the daughter has set it up so she can help with the finances, but they had an email exchange agreeing this making it clear that the money belongs to the mother).

Mel

[didds]

cheers for that nuance Mel - FTR I was viewing it as a 50/50 plit etc .

tx again

didds

[CryptoPlankton]

so basically if joint savings are < £28,500 it doesn't matter how they are held?

didds

That's right. As you are each deemed to have a half share of a joint account, if one of you uses up all individually held savings/assets then you will have reached the lower limit for having to make any contribution towards care (other than from income).

cheers - and if you had £100,ooo in a joint account, that IS deemed to be 50K each, so 50K is "protected"for the other account holder anyway?

And there is no revisiting to make that 2 x 25K subsequently.

?? 9sanity check)

didds

Sorry, I've read Mel's reply to this and your reply to that and I'm not absolutely sure whether your question has been fully answered. If so, then I apologise for this unnecessary post! To all intents and purposes, a joint account between spouses will be treated as owned 50:50, but this continues to be the case when the balance changes. So your "revisiting" scenario would in fact be the case. This is explained in one of the earlier links for a joint account having £50k in it:

One member of a couple enters a care home and has £50,000 in a
joint account. The resident is assessed as having £25,000 (50 per
cent), which is £1,750 above the upper capital limit.
However, £3,500 must be spent from the joint account before the
overall total falls to £46,500 and the resident’s 50 per cent share
falls to £23,250 (upper capital limit).
Dividing the joint account at the outset saves the couple having to
spend more capital than is necessary before the resident’s
assessed share falls below the upper capital limit.

I'm not sure why they have chosen the upper capital limit as, by the same token, it will take twice as much capital to reach the lower limit (when the individual no longer has to pay) if anything above £28,500 is in joint accounts. However, hopefully you are reassured that your current strategy regarding joint current and savings accounts is absolutely fine.

Anyway, sorry if this is superfluous to requirements...