What is deliberate deprivation of assets? Deliberate deprivation of assets is when a person gives away money, property, or other valuables to lower the value of their estate. This is often done before or during an assessment for care fees. If the local authority believes the gift or transfer was made to avoid paying for care, they may decide it was a deliberate deprivation of assets. This decision can have serious consequences for the person involved. Why do people consider giving away assets? Many people want to help family or friends by giving gifts or transferring property. Some hope to reduce the amount they have to pay for care by lowering their assets. Others may simply wish to pass on their wealth while they are still alive. Whatever the reason, it’s important to think about how these actions can affect future care costs and financial assessments. How local authorities assess deliberate deprivation Local authorities look closely at gifts and transfers, even if these took place before a person needs care. If they suspect a gift was made to avoid paying for care, they may see it as deliberate deprivation. They will consider when the transfer took place, the reasons for it and whether the person was aware they might need care in the near future. If the authority decides that deliberate deprivation has occurred, they can assess the person’s contribution to care fees as if the gift had not been made, with the asset or monies still forming part of the person’s estate. This means the person may be asked to pay more, or even the full cost of their care, even though they no longer have the asset. Consequences if deliberate deprivation is found When deliberate deprivation is found, the local authority can ignore the gift when calculating care fees. This can leave the person without the funds to pay for their care, creating a debt to the local authority. The authority has several ways to recover this debt, including going after the third party who received the gift. This situation can be very stressful and may lead to financial hardship or legal action. It’s important to know that giving away assets does not guarantee lower care costs and can result in unexpected problems later on. The importance of seeking legal and financial advice Before making any gifts or transfers, it’s wise to get independent financial advice. A professional adviser can help you understand whether you will have enough funds to cover your care costs. They can also help you gather evidence to challenge a local authority’s decision if necessary. Even with expert advice, there is no guarantee that the local authority will agree with your decision. However, having advice and proper documentation can make it easier to dispute a finding of deliberate deprivation if it happens. Special duties for attorneys and deputies If you are acting on someone’s behalf as an attorney or deputy for property and finances, your responsibilities are even greater. The Mental Capacity Act 2005 and its Code of Practice set out strict duties for those managing another person’s affairs. Attorneys and deputies must seek independent legal and financial advice to make sure they are following the law and acting in the best interests of the person they represent. Failing to follow these rules can lead to legal trouble and may put the person’s care and finances at risk and so it is essential to get proper advice and keep clear records of all decisions and transactions. Summary Deliberate deprivation of assets is an issue that can affect your ability to pay for care. Local authorities have the power to look back at gifts and transfers and may treat them as if they never happened when working out care fees. This can lead to debts and legal action. Before making any decisions about giving away assets, always seek independent financial and legal advice. If you are an attorney or deputy, make sure you understand your duties and get professional support. Our lawyers are available to provide guidance and help you challenge decisions if needed. Taking the right steps now can help you avoid problems in the future and make sure your care needs are met without unnecessary stress. How can Morr & Co help? If you have any questions or would like any further information on the content of this article, please do not hesitate to contact our Court of Protectiton team on 0333 038 9100 or email info@morrlaw.com and a member of our expert team will get back to you. Disclaimer Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position. Authored by Alice Watkins Associate Solicitor Message On this page Contact our team today to find out more Contact us
