Your heirs may not have any estate to enjoy in Spain after your days, when entering a nursing home.
Do you think one day you may be entering a nursing home. First the good news: well, life expectancy in Spain is high. Chances are you’ll live well into your 80s, your 90s and possibly even longer. Maybe not even entering a nursing home. There are no specific statistics for this cohort, because well, we’re new here!
When you live a long life, the likelihood you’ll need long-term health care is greatly increased. A healthy way of life, less stress, better air quality and 320 days of blue skies are helping expats in Spain to live longer than they would back at home.
It is not just us saying that you can live a long life in Spain. Look at what they are doing in Norway. In a new twist on care for the elderly, tens of thousands of Norwegians are currently relaxing in Spain, subsidised by the Norwegian government. These elderly citizens are taking health cures right here in Alicante at a growing number of nursing centres run by Norwegian municipalities.
The reason? It is easier and cheaper for our Scandinavian friends to live longer and happier lives in the Spanish sun, according to their own government.
Long Term Health Care (Entering a Nursing home)
Long-term health care is generally not covered by medical insurance. For most of us unfortunately we need to cover these costs ourselves.
In Spain, if the Spanish government knows you have an asset in the country they will sell it to cover the costs of your medical care in a nursing home. That is if you don’t have sufficient cash to pay it.
This can result in a shock to family members when then lose a parent or a grandparent. The fund of money they believed they were about to inherit may well be used up by medical care costs and expenses.
What happens to British people who go into state care in Spain?
Remember this is a new group of individuals for the Spanish government to think about. So many of our British clients move here for life without the intention to return back to the UK. They would rather grow old in the Spanish sunshine than in the cold and dank UK.
If you or a loved one are living in Spain until you pass away, the likelihood is that you will spend some time in a nursing home in Spain.
Clients often wonder how it will work. We will try to explain:
Effectively, if the medical services decide you need to go to a state run home, then they will allow you to move there, regardless of your financial state. If you have means however, ultimately they pass the costs to you or your estate in Spain.
We don’t think Brexit will affect this current process. First they will take over your UK pension. All that income will go towards your stay in state care, just like it would back in the UK. Next, any shortfall needs to be paid for.
The first place the authorities turn to is your bank account. Any cash you have there will be used for the cost of your medical care. You can’t stop this of course but your family will have the option to pay in advance of any more measures.
Again, let’s say there is a shortfall as there will be for the majority of foreign pensioners in Spain. The Spanish state will in many cases insist on selling your home in Spain to cover costs. Not all expats have considered this.
Any money left over and only what is left over will be your family’s after your days have passed.
These are legal and common activities for the Spanish Government in Spain. Their logic is this: If you have assets in Spain, like a home, and you are living in state care, you are liable to pay for the costs. It is simple to understand the logic.
It is a new consideration for the expat community in Spain as they grow older here.
It is far from certain to think that there will be a lump sum left for your family after your days. Maybe selling your property now in a bare ownership deal is best for your heirs?
You can gift them some money now while you are around to see them enjoy it, while giving yourself a guarantee that you will remain in your home until such time as you no longer can.
British people take out insurance to cover the cost of funerals in Spain but very few think of the real costs they will endure- the rising cost of a nursing home in Spain.
The rising cost of entering nursing or care homes
Care home fees have been rising at above-inflation rates in recent years. The UK inflation rate pre Covid was around 2%, but care home fees increased at more than double that rate almost 5% in fact. In 2019 care home fees rose by the biggest annual hike in 10 years.
The average cost of a residential care home for an older person in the UK increased to 750 euro a week in 2019. The average cost hit 38,000 euro per year.
A care home with round-the-clock nursing care will on average cost 1,000 euro a week, or 52,000 a year, a 4.3% rise on the previous year.
Source: Care Homes for Older People, UK Market Report, LaingBuisson
Some more statistics regarding elderly people.
Morning star investment specialist Christine Benz reports:
We are struggling to find statistics for retirees in Spain for all the obvious reasons but here are some stats from across the Atlantic.
- 9 million: Americans over age 65 needed long-term care in 2012.
- 12 million: Americans are expected to need long-term care in 2020 exclusive of COVID care.
- 25%: % of nursing home costs paid out of pocket.
- 7.5%: % of nursing home costs covered by private insurance in the US.
- 79: is the average age of admittance to a nursing home.
- 40%: % of individuals who reach age 65 who will enter a nursing home during their lifetimes. (I found this fascinating- there is really a coin flip chance that individuals in Spain will end up in care facilities)
- 892 days or 2.44 years is Average length of stay for current nursing-home residents.
- 272 days or 8.94 months is the Average length of stay for discharged nursing-home residents.
- 38%: % of nursing home patients who will eventually be discharged to go home or to another residence.
- 10%: % of people who enter a nursing home who will stay there five or more years.
- 65%: % of people who entered a nursing home who died within one year of admission.
Five months is the typical length of nursing-home stay for patients who eventually die in a nursing home.
- 25%: % of deaths in the U.S. that occurred in nursing homes, again figures are exclusive of Covid cases.
- 40%: expected % of deaths in the U.S. occurring in nursing homes by 2020.
- 68%: The probability that an individual over age 65 will become cognitively impaired or unable to complete at least 2 “activities of daily living”, including dressing, bathing, or eating, over his or her lifetime.
- 42%: % of individuals in nursing homes who are experiencing some form of dementia.
- 44%: Percentage of population age 50 plus in the United states with more than $100,000 in liquid assets.
If these stats are reflected in Spain, elderly people need to start preparing for the chances that they too will spend time in a care facility in Spain, and their heirs are going to pay for it.
|Average Length of Stays in the UK (Nursing Homes)|
|5 years or more||12.0%|
|3 to 5 years||12.0%|
|1 to 3 years||30.3%|
|6 to 12 months||14.2%|
|3 to 6 months||10.0%|
|less than 3 months||20.0%|
|Average Length Of Stay in Years|
|Single / Never Married||3.8 years|
|Divorced / Separated||2.7 years|
Conclusions regarding your assets in Spain.
We are absolutely not trying to scare anyone here, these are just facts people don’t think about when taking out funeral insurance, writing a will or thinking about their heirs. They just don’t think about entering a nursing home.
Like we do with all our clients, it is our job to let you know what may happen as you grow older in Spain.
If you sell your property to try and avoid these fees and costs, that can be deemed illegal in the UK. It is not different here in Spain. In fact, the rules here are almost identical to the rules back in the United Kingdom. Bare ownership is common amongst family members for the very reason identified here; you can protect your assets and heirs by making the right decision and getting the right advice.
Spanish Solutions can help you to secure your estate and ensure your family don’t pay too much even after your days. It is not something we enjoy thinking about but it is important.
Contact us firstname.lastname@example.org