Care home fee planning

If you move into residential care or a nursing home then you may have to contribute towards your care fees if you are assessed as having assets (savings, investments and property including your home) over a specific threshold, currently £23,250 (2015/16).

Giving assets away to children can result in difficulties, especially if the asset in question is your home. What happens if you fell out with your children and they later forced a sale, or a child divorced or became bankrupt resulting in you losing your home. Further difficulties can arise if a child dies before you without having specifically addressed the asset in his/her will.

Trusts can, however, help protect assets from care home fees for the future benefit of your family. For example, couples who own their home together can make wills incorporating a type of trust known as a life interest or interest in possession trust. This type of trust operates so that after the first partner’s death his or her share passes into the trust.

The trust benefits the surviving partner during his/her lifetime and thereafter to the children or other family members. This means that the surviving partner can continue to live in the property rent free for the remainder of his/her life before it passes to other beneficiaries.

If the surviving partner later moves into residential care, the share of the home held in the trust cannot be assessed for care home fee purposes as it will continue to be held in the trust. Furthermore, under current guidelines the surviving co-owner’s share of the property may also be valued at considerably less that the market value because of the nature of the ownership and in some cases the value of the share can be argued as being nil.

Such trusts in your will can also protect your share in property for the benefit of children from a previous relationship.

For anything further, one of our specialists would be delighted to meet you either in our office or in your own home to talk through your requirements and answer any questions. Please contact us at any time.