Care Home Fees – How To Plan For The Future
March 1, 2011 11:43 am - Categorised in: Wills, Trusts & Probate
For the last 20 years or so I have regularly been advising clients who are concerned about the possible impact of care home fees on what they would otherwise have liked to have left to their families when they pass away. This is particularly the case when perhaps the only real asset of any value that they own is a property that has been bought with the aid of a mortgage and paid for by hard work over many years. At the moment, if an individual owns an unoccupied property and is admitted to care, the expectation will be that money from the sale of the property will eventually be made available to cover their care home fees, unless, of course, they have other finances available to them.
Duncan Lyon, Wills & Probate Solicitor
Given the cost of care nowadays, an individual need only be in care for a few years for this to significantly impact upon what otherwise you might have been able to leave to your family and friends. Hence, the regular question that I am asked is whether or not there is anything that can be done to reduce this impact.
First of all, I must point out that if you were to be admitted to care but your property continued to be occupied by your husband or wife, or a relative aged over 60 or one who is registered as disabled, then the property would have to be automatically excluded from any assessment of your financial resources and there would be no requirement for the property to be sold. This is not common knowledge.
Additionally, the actual percentage of people currently in care is comparatively modest. The majority of these will be in their middle-eighties or older and will probably be single, having never got married or having been widowed. There is, therefore, no inevitability that an individual will require care in the later years of their life. Even if a person is admitted to care the impact on what they own arising from the care fees may be reduced by receipt of Attendance Allowance or an NHS contribution towards nursing care. Indeed, in some extreme cases, the NHS may actually cover the whole cost of the care.
However, none of us can ever foresee the future and therefore, for some, arranging their affairs for what could possibly happen in the future is extremely important and can bring with it considerable peace of mind.
For a married couple, there are undoubtedly more things that can be done to lessen the impact of care home fees, as compared to someone who is single. For instance, they could make Wills incorporating trusts which, if properly drawn up, could potentially shelter at least half the value of the family home in the event that the survivor of the couple is admitted to care. The survivor could continue to live in the property following the death of their husband or wife but the dead husband or wife’s share would never actually belong to them and could then be passed on to their heirs when the survivor passes away. The value of the deceased husband or wife’s share would never form part of their estate and therefore could not be included in any assessment of their resources on admission to care.
For some people this will be more than enough. For others it may be of vital importance that as much of the property is protected as possible and, if this is the case, then the careful use of trusts created during the lifetime of the person owning the property could provide a solution. However, the timing of the making of the trust is crucial. I should add that for someone living on their own who wishes to protect their property this may perhaps be the only way in which they can effectively do so.
The law in this whole area is constantly evolving and there are many pitfalls for the unwary and the importance of taking proper legal advice from a solicitor concerning this whole area of law, which is complicated, is absolutely essential.
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