Joint account or not to protect savings if one of us is in a home

tigerspill

NedS said:

If you end up in a care home, only your half of your joint savings would be assessed for your care costs. How much joint savings do you have? Does it exceed the threshold above which you are expected to pay for your care?

If you move all your joint assets into your wife's name and then require care, the local authority may view that as deprivation of capital and you may be required to pay anyway. Councils are pretty hot on this when they perform their financial assessments.

Just out of interest, when this assessment is done, I believe they also look back as some history.  Typically how far do they look back to consider deprivation of assets?  Or how far back is it reasonable for them to look?
The context is husband and wife.

elsien

tigerspill said:

NedS said:

If you end up in a care home, only your half of your joint savings would be assessed for your care costs. How much joint savings do you have? Does it exceed the threshold above which you are expected to pay for your care?

If you move all your joint assets into your wife's name and then require care, the local authority may view that as deprivation of capital and you may be required to pay anyway. Councils are pretty hot on this when they perform their financial assessments.

Just out of interest, when this assessment is done, I believe they also look back as some history.  Typically how far do they look back to consider deprivation of assets?  Or how far back is it reasonable for them to look?
The context is husband and wife.

There isn't a specific timescale. It depends on people's health, whether it is reasonably foreseeable that they may are likely to need care in the future, and whether handing the assets to others was done with the primary purpose of avoiding care home fees. Each case would be judged on the individual circumstances. 
Deprivation of Assets | Age UK

There are people who will give money away for other reasons, when the possibility of needing residential care is a remote possibility. Most people who come on here asking the question tend to be asking about how to preserve their "inheritance" which does tend to suggest that avoidance is the primary concern. 

westv

I would have thought for most couples the majority of assets aren't "mine" or "yours" but "ours" whether they be in joint or individual accounts. I would also imagine most would be unaware they may need to seriously consider the split when it came to care fees.

MTB1986

elsien said:

Generally speaking in a financial assessment money in the joint account is presumed to belong equally to both unless there is evidence to show otherwise. So only half would be counted towards the cost of any care.
however, it may not hurt for her to have an account in her own name as well.
 Because unless you have a power-of-attorney in place then if one of you loses capacity then legally speaking, the joint account should be frozen to protect the person who can no longer monitor it for themselves. 

So if neither of you have power-of-attorney, you might want to put that on your to do list as well. 

A joint account wouldn’t be frozen in the event of one party losing capacity - it would simply continue to be a joint account, unless either party was removed. As you allude to, money in a joint account, as far as a bank is concerned, can be withdrawn by either party at any time, regardless of who deposited it - so no need to freeze anything in that circumstance. 

Grumpy_chap

Contrary to the "fully shared" lives that mature people enjoy, it does make sense for cash assets to be in separate accounts for the purpose of how much is contributed to pay for care home fees (self-funding above £23,250 for an individual).

The assessment of how much is each individual's is done repeatedly each period.

Say a couple have £100k. 
This is assessed as £50k each. 
In the first month, the care home fees have depleted this to £95k.
This is assessed as £47.5k each
Second months, another £5k fees leaving £90k.
This is assessed as £45k

Say a couple have £50k each in separate accounts.  £100k total.
In the first month, the care home fees have depleted this to £45k plus £50k for the spouse (still in separate accounts).  Still £95k in total.
This is assessed as £45k plus £50k (spouse's value is ignored)
Second month fees £5k, leaves £40k plus £50k.  Still £90k total.
You can see how, once the value of the first spouse drops, then the LA contributions to care can kick in while total assets are £23,250 plus £50k = £73,250
If all the funds were held in joint accounts, the value would need to deplete to £46,500 before the LS contributions can be assessed.

Keep_pedalling

Grumpy_chap said:

Contrary to the "fully shared" lives that mature people enjoy, it does make sense for cash assets to be in separate accounts for the purpose of how much is contributed to pay for care home fees (self-funding above £23,250 for an individual).

The assessment of how much is each individual's is done repeatedly each period.

Say a couple have £100k. 
This is assessed as £50k each. 
In the first month, the care home fees have depleted this to £95k.
This is assessed as £47.5k each
Second months, another £5k fees leaving £90k.
This is assessed as £45k

Say a couple have £50k each in separate accounts.  £100k total.
In the first month, the care home fees have depleted this to £45k plus £50k for the spouse (still in separate accounts).  Still £95k in total.
This is assessed as £45k plus £50k (spouse's value is ignored)
Second month fees £5k, leaves £40k plus £50k.  Still £90k total.
You can see how, once the value of the first spouse drops, then the LA contributions to care can kick in while total assets are £23,250 plus £50k = £73,250
If all the funds were held in joint accounts, the value would need to deplete to £46,500 before the LS contributions can be assessed.

In practice it does not work like this financial assessment is not continuous and the care fees only reduce the person in care share. It would make it a lot easier to manage if at the point that residential care looked likely, all joint savings were split. 

Grumpy_chap

Keep_pedalling said:

Grumpy_chap said:

Contrary to the "fully shared" lives that mature people enjoy, it does make sense for cash assets to be in separate accounts for the purpose of how much is contributed to pay for care home fees (self-funding above £23,250 for an individual).

The assessment of how much is each individual's is done repeatedly each period.

Say a couple have £100k. 
This is assessed as £50k each. 
In the first month, the care home fees have depleted this to £95k.
This is assessed as £47.5k each
Second months, another £5k fees leaving £90k.
This is assessed as £45k

Say a couple have £50k each in separate accounts.  £100k total.
In the first month, the care home fees have depleted this to £45k plus £50k for the spouse (still in separate accounts).  Still £95k in total.
This is assessed as £45k plus £50k (spouse's value is ignored)
Second month fees £5k, leaves £40k plus £50k.  Still £90k total.
You can see how, once the value of the first spouse drops, then the LA contributions to care can kick in while total assets are £23,250 plus £50k = £73,250
If all the funds were held in joint accounts, the value would need to deplete to £46,500 before the LS contributions can be assessed.

In practice it does not work like this financial assessment is not continuous and the care fees only reduce the person in care share. It would make it a lot easier to manage if at the point that residential care looked likely, all joint savings were split. 

That was exactly how it worked in practice when my father went into a nursing home.  The LA assessed the joint funds and halved them every assessment period.  Different LA's may apply this in different ways, hence your experience may have been different.

westv

Grumpy_chap said:

Keep_pedalling said:

Grumpy_chap said:

Contrary to the "fully shared" lives that mature people enjoy, it does make sense for cash assets to be in separate accounts for the purpose of how much is contributed to pay for care home fees (self-funding above £23,250 for an individual).

The assessment of how much is each individual's is done repeatedly each period.

Say a couple have £100k. 
This is assessed as £50k each. 
In the first month, the care home fees have depleted this to £95k.
This is assessed as £47.5k each
Second months, another £5k fees leaving £90k.
This is assessed as £45k

Say a couple have £50k each in separate accounts.  £100k total.
In the first month, the care home fees have depleted this to £45k plus £50k for the spouse (still in separate accounts).  Still £95k in total.
This is assessed as £45k plus £50k (spouse's value is ignored)
Second month fees £5k, leaves £40k plus £50k.  Still £90k total.
You can see how, once the value of the first spouse drops, then the LA contributions to care can kick in while total assets are £23,250 plus £50k = £73,250
If all the funds were held in joint accounts, the value would need to deplete to £46,500 before the LS contributions can be assessed.

In practice it does not work like this financial assessment is not continuous and the care fees only reduce the person in care share. It would make it a lot easier to manage if at the point that residential care looked likely, all joint savings were split. 

That was exactly how it worked in practice when my father went into a nursing home.  The LA assessed the joint funds and halved them every assessment period.  Different LA's may apply this in different ways, hence your experience may have been different.

Surely there should only be one "right" way to do it??

elsien

MTB1986 said:

elsien said:

Generally speaking in a financial assessment money in the joint account is presumed to belong equally to both unless there is evidence to show otherwise. So only half would be counted towards the cost of any care.
however, it may not hurt for her to have an account in her own name as well.
 Because unless you have a power-of-attorney in place then if one of you loses capacity then legally speaking, the joint account should be frozen to protect the person who can no longer monitor it for themselves. 

So if neither of you have power-of-attorney, you might want to put that on your to do list as well. 

A joint account wouldn’t be frozen in the event of one party losing capacity - it would simply continue to be a joint account, unless either party was removed. As you allude to, money in a joint account, as far as a bank is concerned, can be withdrawn by either party at any time, regardless of who deposited it - so no need to freeze anything in that circumstance. 

It can be frozen - the  guidance says that this is at the discretion of the bank. The reason being that the person who has lost capacity is unable to monitor what is happening with the account and unable to intervene if there were any concerns about how the account was being managed. 

https://www.btwc.co.uk/the-impact-if-a-joint-account-holder-loses-capacity/

MarzipanCrumble

Devils Advocate here:  How are you going to protect your assets if one of you dies first without care need then the other surviving partner needs care?  Your home is no longer 'protected' nor are your 'savings'.

Just a thrown spanner.......