Page 11 - CPB March 21st

The Care Property Bond is intended to top up the income from the customer’s existing income from their pension and other investment streams.
The advantage of the Care Property Bond is that it avoids the immediate prospect of having to sell the elderly person’s property in the open market, possibly at a discount because of the time sensitivity, and incurring estate agent and other conveyancing fees. Such activity would also entail dealing directly with lenders, estate agents, valuers, conveyancers and possibly an accountant to fill in self-assessment tax returns. The Care Property Bond simplifies such steps at a time when the elderly person and their family should focus their attention on the person’s care needs.
The Care Property Bond also avoids the risk that might arise if the elderly person were to live for a long time in a care home and the proceeds of sale of the property prove to be insufficient to continue the payments to the care home of the person’s choice. Unfortunately, in such circumstances, a cash-strapped local council might be forced to step in and it may decide to move the elderly person to a council-funded care home, which may not meet the original benefits enjoyed under the original care home, such as location near relatives and friends.
The Care Property Bond provides a level of consistency. In the event, the health of the elderly person further deteriorates in the future, and subject to proper financial and legal
advice to be received at the time, there may be ways to re-adjust the level of annuity under the original Care Property Bond to meet any enhanced care home costs.
Under the Care Property Bond, Shaw Insurance Group mortgages the property to raise finance by way of a monthly annuity to meet the monthly costs of care home fees. Shaw Insurance Group also liaises with third-parties to turn the property into tenantable condition, maintain it to adequate standards, insure it appropriately and let it out to third-party tenants under a market standard assured shorthold tenancy. Upon death of the customer, and subject to instructions from Personal Representatives, Shaw Insurance Group makes arrangements with a view to pass on the remaining net equity in the property and/or the property itself to the customer’s Estate.