There are so many questions surrounding what people can/should do to protect their assets whilst still providing for their care when they become incapacitated and unable to look after themselves later on in life.

Many of our clients share a common concern: the possibility of losing their assets, especially their home, if they need long-term residential care.

The cost of residential and nursing care rises every year. With the average weekly cost of care on the Island being approximately £1,000 per week, it is understandable why individuals seek to safeguard the assets they have worked hard for during their lifetime.

If you require residential care, the Government carry out an assessment of your financial position. This includes both your income and capital. Should the Isle of Man Government calculate that your assets are above the thresholds (currently £13,000) you will be required to pay for your care yourself without assistance from income support.

There are many different steps you can take to safeguards your assets. The key is to ensure that your actions are legal and compliant with existing laws and regulations. This is a good reason to ensure that you are taking specialist advice and not leaving it to chance.

A common question that we are asked is whether people can gift away assets or transfer their home from their name into that of another to try and avoid the possibility of care costs in the future.

It is important that the implications of transferring assets and your home are fully understood. The advantages should be weighed against the disadvantages in order that you make the appropriate decision for your circumstances. However, with any gift or asset transfer you should bear in mind the rules regarding self-deprivation of assets. Should you transfer any sum of money during your lifetime when/if it comes to paying for care the Government may state that you have deliberately deprived yourself of assets. This can include not just the transfer of your property but any other financial transfer such as providing children with house deposits or making lifetime gifts to friends or family members.

There are few time limits on such transfers and the Government can look back to transfers or transactions and may assess you as still owning those assets. This can cause difficulty if you have transferred the asset to a third party who has then relied upon that transfer, i.e. you might cause financial difficulty for such third party.

There are a number of elements that can end up playing a part in a decision on this issue, but the two most obvious are the length of time which has passed since an individual “disposed” of an asset, and whether there was a genuine or significant alternative reason for giving away the asset.

Whilst you cannot avoid care fees altogether and nor can you purposely reduce your own estate to claim benefits or care, there are numerous options available to help to protect your assets from the impact of residential care fees.

With careful planning and advice you can take steps to limit your potential exposure.

If you wish to obtain advice in respect of the above, please contact one of M&P Legal's private client team, Patrick Swanney or Amelia Quinn on 01624 695800 or email pas@mplegal.im or ajq@mplegal.im.

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