The care fees landscape is constantly changing and it is important to understand the options available to ensure that you can make an informed decision.
Many people are keen to shelter their assets from care fees for their loved ones and often the most valuable step is to be proactive and plan sooner rather than later.
Where people are already in contact with the care system, there might be the need to question where care assessments and financial assessments are accurate. These assessments are the gateway to the care system and it is, therefore essential that they comply with up to date case law and guidance.
We are able to offer advice on the following areas:
Are you concerned about the impact care fees may have on your home? This is a complex area.
You should seek advice regarding what you can and can’t do in this regard – contact one of our experts who will arrange a 30 minute free no obligation face to face meeting to discuss matters further
For further information please consider the working example below:
Mr & Mrs X own their home as Joint Tenants, so when Mr X dies the entire home passes to Mrs X.
Later in life Mrs X moves into care. The house is sold and the majority of the proceeds of sale are used to pay for her care fees.
Mr and Mrs Y own their home as Tenants in Common. Mr Y dies and his half of the home passes under his Will to their children. Mrs Y continues living in the home.
Later in life Mrs Y moves into care and the home is sold. Only Mrs Y’s half share of the sale proceeds are used to pay for her care. The other half has been protected under Mr Y’s Will.
My partner and I have become concerned about being forced to sell our house if we need to go into care. Our friends tell us they recently prepared Wills which shelter their house from care fees. Is this possible?
Yes it is possible by preparing Wills incorporating Family Trusts.
Generally speaking, a family home will be owned as Joint Tenants. This means when the first person dies, the property passes to the survivor, regardless of the provisions of the deceased’s Will.
Consideration should be given to changing the ownership to Tenants in Common. This means that when a person dies, his or her share in the property can be passed in accordance with his or her Will.
In the case of care fees and asset protection, this share of the property could be passed into a Family Trust.
A worked example of the Family Trust may help illustrate the benefits of this arrangement: Let us consider the case of Mr and Mrs Prudent who are a married couple and have two adult children Michael and Sarah.
If Mr and Mrs Prudent prepared Wills incorporating Family Trusts, a greater share of the assets would have been preserved:
This arrangement also protects Mrs Prudent’s occupation from risks, which arise with an outright gift, such as her children becoming involved in matrimonial or financial difficulties.
This case study is intended as a basic worked example for illustration purposes and does not necessarily reflect your personal financial circumstances or take account of particular income levels or savings and investments, which should be discussed with your adviser.
The Family Trust is not limited to property arrangements and cash investments can also be put into the Trust if required.
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