Care Flashcards
1
Q
Benefits of Ingenious Care Plan (8)
A
- for clients who may need care in the future
- plan is liquid / funds provided (by ingenious) within 2 weeks
- ingenious provide help selecting a suitable care package
- funds outside estate after 2 years /qualify for BR
- maximising the estate
- client has CFL
2
Q
Benefits of immediate Needs Annuity (6)
A
- no investment risk/guaranteed income
- if client lives longer than expected then will help cap cost of care
- meets ATR
- simple to understand
- payable for life
- income is index linked to help with increases in care costs
- payment to REGISTERED care provider is tax free
- immediately outside the estate for IHT purposes
- due to age/medical conditions should get enhanced income
- helps enable future gifts of remainder of estate
3
Q
Drawbacks to Immediate Needs Annuity (6)
A
- client may not live long enough to receive full value
- no capital protection / if client dies prematurely then less in estate to pass to family
- income taxed if care provider not registered
- care fees may increase by a greater amount than index linking of the INA
- this will lead to an increasing shortfall each year
- income is fixed/ can not be altered
- may be costs of setting up INA
- income provided may not cover full care costs
- if health worsens INA May be seen as poor value
- takes no account of future increases in care costs
- inflexible / no ability to change after cooling off period
- loss of capital in event of early death
- loss of potential returns from investing
4
Q
SJP Special Care / vulnerable client Procedures (5)
A
- should have a third party present
- if an LPA is in place then attorney should be present
- establish if client has mental capacity
- must not give advice to client if unable to make their own decisions
- 3rd party must be copied in on correspondence
- relevant section of CFR complete
5
Q
Duties of attorneys (10)
A
- duty of care
- carry out donors instructions
- not to take advantage of their position
- duty of good faith
- confidentiality
- not to delegate unless authorised to do so
- comply with directions from CoP
- not to disclose information without complying with relevant guidance
- keep accounts
- keep donors property and money separate from their own
6
Q
Long term care fact finding considerations (10)
A
CLIENT:
- Health/disability
- life expectancy
- clients attitudes to remaining at home
- IHT considerations
- any care benefits currently being claimed? AA?
- CFL
- future gifts planned?
- likely timeframe until care is needed
- have they had a care assessment?
- do they need guaranteed income
- no they need any capital lump sums?
- any tax implications from selling existing assets?
FAMILY:
- family support (care available)
- who is making the decisions - POA details
- third party top ups
- prepared to use other assets to fund
- would they downsize?
CARE:
- legal provisions / will provisions
- timing of care - availability and type of care available
- likely care costs
- inflation assumptions
7
Q
Advantages of downsizing to pay for care (5)
A
- equity released to invest
- maintenance costs are reduced
- smaller property more suited to needs
- independence retained
- reduces exposure to property / increases diversification
8
Q
Disadvantages of downsizing (6)
A
- costs of selling will reduce the amount available
- family home lost for next generation
- state benefits may be lost
- new investment may lose value
- stress
- may impact on means tested state bens / local authority funding
- GWR rules
9
Q
Advantages of renting out he family home (4)
A
- future property growth retained
- more suitable property can be rented
- rental income may contribute to care costs
- deferring property may benefit from future price rises (though opposite may be true also)
10
Q
Disadvantages of renting out the family home (7)
A
- doesn’t release equity as a lump sum
- ongoing responsibility for property maintenance
- may impact on men’s tested state benefits and LA funding
- need to managed tenants / employ management firm
- CGT implications
- income is taxable
- probable void periods
- income generated may not meet care costs
11
Q
Reasons to set up / process of setting up an LPA (7)
A
- LPA should be set up so that it only becomes active once capacity has been lost
- so that others can’t make decision until they have lost capacity
- the mental health act 2005 recognises the mental capacity can come and go
- end of life instructions can be included in the H and W LPA
12
Q
Advantages of using a lifetime mortgage with a drawdown facility to fund ongoing care costs (6)
A
- flexibility in the amount and frequency of withdrawals
- interest is only charged on amounts withdrawn
- income is tax free
- there is a ‘no negative equity’ guarantee
- can remain in their own home
- enable them to pass on property to children
- benefit from future increases in property value
13
Q
Drawbacks of using a lifetime mortgage with a drawdown facility (6)
A
- set up costs/ legal fees
- still responsible for maintaining the property
- reduces inheritance for beneficiaries
- interest rate likely to be higher than a normal SVR
- inflexible
- likely to be restrictions in downsizing
- likely they loan will need to be repaid if they enter permanent care
14
Q
Purpose of Certificate Provider’s Statement? (4)
A
- purpose is that someone independent of the client
- and the attorneys
- can confirm that Philip understands the purpose and scope of the LPA
- and to establish that he is not acting under duress
- his mental competence will be established by his GP
- using a mini mental state exam
15
Q
How does lacking mental capacity affect how future care decisions can be made in clients behalf?
A
- LPA can not be set up
- CoP will decide who will be appointed as deputy
- the deputy’s powers are likely to be more restricted than under an LPA
16
Q
Reasons for an H&W LPA over an Advance decision
A
- advance decision only covers end of life medical decisions
- a advance decision is legally binding but can be challenged if not clear
- a correctly prepared LPA can not be challenged
- clients should both write a H&W LPA whilst they have capacity
- clients can take account of their current circumstances e.g m. Early onset of altzhiemers
- LPA sets Out how they wish to be cared for on an ongoing basis ASWELL AS end of life care requirements
- LPA should be set up on a jointly and severally basis
- Allow the attorneys to act Independently of each other
17
Q
Implications of financial / health decisions if lose capacity without an LPA in place
A
- no instructions will have been provided about future finance/health care needs
- this would now come under the jurisdiction of the Court of Protection
- a Deputy would be appointed by the CoP
- this may end up being a close family member
- until a Deputy is appointed no financial transactions can take place
- and no arrangements for care can be made
- Deputy is unlikely to be granted powers to make gifts, any estate planning or make any end of life decisions
18
Q
Decisions required in an LPA
A
- who will be the attorneys
- same attorneys for each LPA
- do they want replacement attorneys
- whether attorneys have the power to act jointly or jointly and severally
- who the certificate provider will be
- when does the donor want the LPA to come into effect
- instructions for future gifts/ care/ end of life decisions
- who the donor would like to be notified when the LPA is registered
19
Q
How would you ‘check out’ a new attorney? (6)
A
- do they have authority to represent the client
- LPA documentation ha OPG stamp on each page
- Type of POA?
- are there any restrictions on how they can act?
- how many attorneys/replacement attorneys are there?
- can they act jointly or jointly and severally?
20
Q
How are income and assets assessed for care provision
A
- any DLA is disregarded
- the value of any property is disregarded if anyone else lives there too eg. Spouse
- FAD are treated as what income they would have produced if they bought an annuity
- any due inheritances are included
- 50% of joint savings is included
21
Q
Factors to consider regarding long term care:
A
Level of disability/ attitude of the family
- when is care likely to be needed
- how long for
- what is the current medical and family opinion regarding about the clients current care requirements
- possible future changes
- what care is available at home
- clients and families attitude towards care provision
- if residential or nursing care is needed to they have a particular care home in mind?
- has a care assessment been completed
INCOME:
- what income do they currently have
- what benefits are they currently receiving
- what is their marital status, jointly held assets generally treated as owned 50/50
- any unearned income
- what pensions do they have ?
- TFC to be taken?
ASSETS:
- what assets do they have?
- share portfolio with CGT?
- tax implications
- inheritances due?
- liabilities
- is it important to maximise income to pay for fees or maximise estate
- can they encash investments to pay for care
- aims, Growth/income
ATR
CFL
- desire to remain independent
- do they have a will
- has an LPA been set up?
- what type?
- who are the attorneys
- any restrictions?
- are the family aware of the clients intentions
- clients views towards gifting and IHT planning
- previous gifts made
22
Q
Factors to consider for funding of care costs (10)
A
- cost of care
- stability of the condition
- assumed inflation
- assets
- CFL
- ATR
- other sources of income eg pension, investment income
- IHT consideration
- family considerations, eg ability to part fund/ provide care
- attitude towards IHT planning / gifting
- affordability for the client
- possible third party top ups
- clients desire to remain independant
- level of benefits to be received
23
Q
Advantages of domiciles care (3)
A
- peace of mind, the client can stay in familiar surroundings and still receive care
- often cheapest way to receive care
- no restrictions on eg visitors or keeping pets
24
Q
Disadvantages of domilcilary care (4)
A
- care not 24/7 so maybe a risk
- appointing carers needs to be managed
- agency carers give no guarantee of continuity of staff
- may not be suitable when a significant amount of care is needed
25
Q
Sheltered accommodation
A
- range from Luxury apartments to self contained flats
- private or public
- ability to live independently but knowing help is close by in an emergency
- not suitable for people with high levels of care requirements
- costs similar to domicilary care
- typically used by people to downsize
26
Q
Immediate care and reablement
A
- provided free by NHS
- for patients who need short term intensive medical care
- usually at home
- for individuals who would otherwise have to have inappropriate in patient care
- result of assessment of needs
- must have planned outcome
- time limited - usually 2-6 weeks
- aimed to promoted independence
- and limit time in hospital
27
Q
Respite care
A
- provide cover for normal cater if they are unable to care or need a break
- provided free by NHS if they qualify
- or local authority if not, who will probably charge
28
Q
Residential care home
A
- technically known as ‘care homes without nursing’
- run by councils or usually commercial care homes
- provide personal care for people who do not need medical care
29
Q
Nursing care home
A
- similar to residential care homes but provide registered nursing care
- client likely to be highly dependant on care
- costs higher than residential care due to medical support or additional staffing levels needed
30
Q
Hospital care
A
- for individuals with high degree of medical care needs
- usually highly dependent on care provided by others
31
Q
Elderly mentally ill care
A
- care for elderly with illnesses such as dementia
- nhs provision
32
Q
Qualification rules for Financial Assistance
A
- income and assets under £23,250
- in England
33
Q
Reasons not to recommend the SJP Later life planning scheme (6)
A
- where client can not afford to make an outright gift
- where client is already in receipt of AA or DLA
- particularly if they are funding care costs
- if funding care then An INA would usually be more appropriate
- where client is not concerned about care in the future
- it is unlikely the client will survive 7 years
34
Q
Benefits of SJP Later Later Planning Scheme
A
- income for life or until fund exhaustion on qualification to pay for care costs
- investment free of IHT after 7 years
- all growth immediately outside estate
- freedom to vary beneficiaries
- IB must be written on lives of some or all beneficiaries which gives the trustees flexibility to defer encashing the investment until a more opportune time
- ability to select a rising income on qualification under the scheme
35
Q
Drawbacks of SJP LLP Scheme
A
- NRB needs to be available
- DOV should be considered if client has received inheritance in last two years
- BR/EIS solutions should be discounted first
- outright gifting should be discounted
- where client has sufficient assets to fund care then a Gift Plan should be considered
- where client wishes to access capital then a loan plan should be considered
36
Q
Why is it important to have at least one replacement attorney for each power of attorney:
A
- if attorney is unable to act / dies
- then the LPAs will end
- if this happens then future decisions will fall to a Deputy
- who is appointed by CoP
- and may not act in the way the client wishes
- replacement is likely to act as client would want
37
Q
Gifts that attorneys may make under an LPA (5)
A
- gifts on customary occasions (birthdays etc)
- gifts that follow any previous pattern
- under the ‘de minim is’ Rio, gifts up to £5500 per year may be made
- however the size of gif t must not be unreasonable in relation to the size of the donors estate (not them them short is money)
- unable to make substantial gifts even if for IHT purposes, without permission of CoP
38
Q
6 advantages and 6 disadvantages of an immediate needs annuity (12)
A
Advantages:
- guaranteed income
- for life
- tax free if paid to registered care home
- simple to understand
- immediately outside estate for IHT
- if in poor health then could get enhanced rate
- enables to make further gifts from estate in the future
- if live longer than expected then caps the cost of cap
Disadvantages:
- income taxed if care provider not registered
- costs of setting up INA
- costs of selling existing investments
- takes not account of future care cost increases
- inflexible
- loss of capital on early death
- loss of access to capital
- loss of potential returns from investing in asset backer investments
39
Q
How must an attorney of an lpa act? 5
A
- follow instructions the donor included in LPA
- consider any preferences the donor included in the LPA
- help the donor make own decisions as much as they can
- make decisions in the donors best interests
- respect donors human and civil rights
- make the decisions themselves / not ask someone else to make the decisions for them
- though they can get help with difficult decisions
40
Q
What a donor can and cannot do (re gifts etc)
A
- can make gifts for occupations such as birthdays
- make donations that the donor would not object to Eg to charities they had previously donated to
Must apply to CoP for any other type of gift
Such as:
- making interest free loans
- letting someone live in the donor is property without paying market rent
- pay school fees
Must ensure the donor can afford them and is not left short of cash
When selling donors property they must get legal advice if:
- sale price is less than market value
- they intend to purchase the property themselves
Attorney can apply for a statutory will if donor needs to make one but cannot make one themselves
- can not change donors will
41
Q
Principles of the mental health act 2005 (4)
A
- MHA recognises that mental capacity can come and go
- when exercising powers under the MHA
- the attorney is required to let the donor make their own decisions
- unless it can be shown that they are unable to do so
- must also recognise that just because the donor makes a decision that the attorney feels is strange or unwise does not mean they are mentally incapable of making a decision
