Will I need to pay for my partner’s residential care?

residential care fundingThe thought of having to go into residential care when we are older, and having to pay for that care, can be a worry for some particularly when the cost can range from $870 to $955 per week depending on part of the country you live in.

A government residential care subsidy may be available to you if you meet the needs and financial means assessments. But, a question we are being asked more and more frequently is whether you may be required to pay for your partner’s residential care if your partner needs to go into care and their separate property is not sufficient to pay for such care?

In an era where blended families is the norm and forming new relationships later in life is a common occurrence, many choose to keep their financial affairs separate to ensure that their wealth is passed down to their own children. Unfortunately, no matter what arrangements you and your partner put in place to determine the status, ownership and division of your property upon separation or death, the Ministry of Social Development (the Ministry) when assessing an individual’s financial means will include the value of the couples combined assets as part of the financial means assessment.

It is important to note that while your separate property can not be called upon to pay for your partner’s care, the value of your combined assets may mean that your partner does not qualify for the residential care subsidy. This can seem incredibly harsh and unfair if the couple have always kept their financial affairs separate.

On the flip side though, if one partner dies and leaves under their will a life interest to the surviving partner in the assets they own together (the deceased’s partners children being the final beneficiaries) the value of the assets subject to the life interest will not be included in the surviving partner’s financial means assessment, if they were to require residential care. But, care must be taken with the drafting of your will, in many cases the surviving partner may be entitled to use the capital of the deceased partner’s share of the couple’s assets if it is considered by the trustees of the deceased partner’s estate that the surviving partner reasonably needs it.

So when both partner’s are living, you can keep your assets separate from each other but the Ministry will include the total value of the couples assets when determining the eligibility for a subsidy. But, where one partner has died, the surviving partner may have a life interest in their deceased partner’s assets and the Ministry will not take the deceased partner’s share of the assets into consideration.

As you can see, ensuring you receive the right advice when asset planning can be crucial to the outcome for you. If you wish to have a confidential conversation regarding your affairs, please contact Franklin Law.