Do you remember Mrs Yule? In case you don't, allow me to remind you. Mrs Yule petitioned the Scottis...
Do you remember Mrs Yule? In case you don't, allow me to remind you. Mrs Yule petitioned the Scottish Court of Session earlier this year, hoping that the court would overturn a decision of Fife Council that she and not the council was responsible for her long term care costs.
The story behind the case was that Mrs Yule owned a house which she transferred to her granddaughter. When Mrs Yule later had to enter a nursing home, the council treated her as still owning the house, which represented capital of over £16,000. It believed Mrs Yule had given the house away to avoid paying the care fees.
Mrs Yule sought to have the council's ruling overturned. But the Local Authority won its case - on the basis of its belief that 'deliberate deprivation of assets' had taken place. Mrs Yule and not the council was responsible for her care fees.
The judge involved, Lord Philip, accepted the council could not prove deprivation had taken place. But in the absence of a more convincing explanation, the council had behaved reasonably in concluding that deprivation of assets had taken place, and as a result was entitled to refuse to pay Mrs Yule's care fees.
Some weeks ago, Mrs Yule appealed against Lord Philip's decision. This appeal has now been turned down. The court's decision was expressed as follows:
"We agree with (the judge) that it is open to a local authority to decide the purpose of a transaction such as the present, without any specific finding as to the exact state of knowledge or intention of the applicant, so long as the primary facts are such as to lead to the inference that the purpose was at least in part that specified in regulation 25(1)."
"For all these reasons the respondents (i.e. the council) were, in our opinion, entitled to reach the decision that they did and to hold that they were not satisfied that Mrs Yule was unable to pay for accommodation charges for her residential care accommodation at the standard rate for the reasons which they gave....Accordingly, the reclaiming motion (i.e. the appeal) will be refused."
As I have commented before, Mrs Yule was not a wealthy woman, and her home was a modest one. Nevertheless, she lost her case - twice. This type of case does not come to court very often, but what I think these judgements show, particularly the rejection of the appeal, is that the courts will look at all the facts in these cases, and will not be sympathetic where it considers there has been any deprivation of assets.
And from the adviser's point of view, what such cases do show is the benefit of planning for care costs using long term care insurance - a process not subject to the scrutiny or the possible disapproval of the authorities and the courts.
(Regulation 25(1) is part of Statutory Instrument 2977 of 1992, which sets out the charging procedures which apply to residential accommodation. It simply says that a person may be treated as possessing capital of which they have disposed for the purpose of avoiding or reducing their liability for charges for residential care.)
