YOU may have seen coverage of the recent King's Fund / Nuffield Trust Report "Home Truths".

It explains that many local authorities are struggling to meet their obligations under the Care Act.

Somerset is no exception. We have recently seen the County Council introduce a 'Funding Panel'.

I assume this Panel is designed to help the council balance the gap between its obligations to local residents and the money it has available to meet their needs.

I understand that the Panel's approval of funding proposals is required before plans are put in place to meet care needs.

Inevitably that is posing some bureaucratic challenges.

But one feature has emerged that you should be aware of because it may affect the way you prepare your Will.

Background I frequently advise couples with two key priorities:

  •  They want to leave something for their children; and
  • They want to live at home until they die.

We have a reasonably lengthy chat about this to explore the options and the consequences their choices would have.

The outcome is often a Will that contains a form of Trust designed to protect at least half the value of their home for their children.

That is accompanied by advice to complete of Lasting Powers of Attorney to deal with their wish to continue to live at home for as long as possible.

I always explain that there are 'downsides' to this type of arrangement.

A key one is that once one of them dies, the survivor does not own the whole of the house.

That means that they cannot automatically use the whole of the value tied up in their home to fund care.

I warn them that they may not be happy with the level of care the Local Authority would be able provide.

"You might want to stay at the Ritz, but if the taxpayer is meeting the bill, it is not unreasonable for the state to offer you a room at the Premier Inn."

Clients usually accept that risk as the price of being able to pass some wealth on to the next generation - after all Premier Inns are perfectly acceptable hotels.

However, the way care is funded is changing.

It has always been the case that a Will placing part of your home into a trust could limit the choice of residential or nursing homes available to the surviving partner.

It did not mean that the point at which you might go into residential care would be brought forward.

The New Position on Funding Somerset County Council is one of a growing number of local authorities who consider that their obligation to provide care is limited to the cost of meeting a person's needs in a care home.

Many people consider that to be wrong, but this view is yet to be tested in court.

For people who receive care in their own home the policy can mean that they have no choice but to move into a care home once their needs require more than a few visits from a carer each day.

If that point is reached unless you or your family can arrange free care or fund the gap between what the council will pay and what care in your own home costs, you will have two choices:

  •  Stay at home with inadequate care and be put at risk; or
  • Move into a residential care setting.

For people who no longer have capacity, the first option is not viable.

It could not be in the person's 'best interests' to stay in an environment that might mean they are unsafe or subject to neglect.

It is not surprising that most people in this situation feel they have no option but to go into a care home.

Two further points are worth noting here:

  •  The person in receipt of care may already have spent all their savings on care in their own home. They might assume that once their money runs out the council will step in to help them to continue to live in their own home. The news that they must move into a care home, and the fact that it is often given at a point of crisis (i.e. the money has run out), can be surprising and very distressing.
  • If the person is a homeowner and goes into residential care, the value of their property can be included in the council's 'means test'. The Council will not have to pay anything towards the cost of care until the value represented by the property has been 'spent'.

Obviously the person concerned and their family are often extremely unhappy with this and solicitors like me are often asked to contest the council's decision.

The 'Home Truths' report noted a significant increase in legal action by families and there has been a significant increase in complaints to the Local Government Ombudsman.

However, while those arguments go on, the person who wants to stay at home does not have the money to pay for the care that can keep them there.

Avoiding Being Pushed Into Residential Care One possibility in those circumstances is to look to an Equity Release product.

This can provide funding for the person to stay in their home while a long term solution is found.

Taking that approach can also allow the person in receipt of care, regardless of the outcome of the dispute with the council, to ensure that the value of their home is used to help them stay there rather than to fund care in a location they do not want to move to.

The Problem With Trusts If the partner of the person needing care made a Will that included a trust it can pose an obstacle to Equity Release.

If the Trust has a share in the person's home, Equity Release will not normally be available unless the Trust is undone. That may not be possible.

Given the change in local authorities' attitude to funding care, my conversations with clients are getting trickier if they want to stay at home and to protect some wealth to pass on to the next generation.

We may well be moving to a position where the majority of homeowners will have to choose between these options rather than being able to balance them.

If you have these competing priorities then I strongly advise you go back to your adviser if you have a Will that contains a trust, or if all or part of your home is already in a trust.