Care Home Fees
You’ve worked hard your whole life, own your own home, have the security of savings and feel pleased to have built up an estate that will be passed on to your children.
However, what if? …….. You reach a stage where you are no longer able to safely look after yourself and need the support of a care home? Residential care, that could be your home for several years, care that will eat into your savings and potentially other assets including your home.
In the UK, if your capital is above £23,250, you are likely to have to pay your care fees in full. The local authorities carry out a financial assessment (means test) looking at your entire estate, including savings, property, investments and pensions.
Statistics from Age UK, in May 2019 (pre pandemic) of elderly people in care homes across the UK were as follows:
- 400,000 residents
- £44,000 average annual fee paid
- 6 in 10 of those residents were diagnosed with dementia
- Only 46% of care home residents are part or fully funded by their local authority
With numbers like this, it’s not going to take long to make a big dent in any savings. So, what can we do to protect our estate?
Even though none of us like to think of needing care in later life, the key is to plan in advance and the good news is that there are several things you can do, including:
- Gifting to your children while you are still healthy, with no prospect of needing care
- Putting your share of your property into trust for your children (known as a Property Protective Trust Will)
To explain things a bit more, a care fee will, means that rather than leaving your share of the property directly to your surviving partner, you leave it in trust. What this means is that on the death of the first person, the surviving partner continues to live in the property but it will never become part of their estate. As such, if the surviving partner needs to go into a care home, their property will not be included in their financial assessment.
Please note that to leave your part of the property in trust for your children, you do need to ensure your home is owned as tenants in common and not as joint tenants.
Something else to be aware of, is deliberate deprivation of assets. This is if someone is deemed to intentionally reduce their assets, at a time it would be considered with the deliberate intention of avoiding care home fees. Examples of this could be:
- Giving away a lump sum
- Transferring the title deeds of your property
- Unusual expenditure of large amounts of money
- Buying possessions like cars and jewellery that would be excluded from the means test.
To ensure your will is written to protect your assets from care home fees please do not hesitate to call me on 0808 146 9295. Or contact me here.
