Care home fee planning


An increasing number of people are taking steps to protect their assets from future residential care home fees. Many couples own their home as joint tenants meaning that upon the first death the property (subject to any mortgage) passes to the survivor. If the survivor is in residential care then the property will become fully assessable in the hands of the resident for care home fee funding. In short, the resident will have to pay his/her own fees going forward. This can, however, be avoided.

A solution is for the couple to make wills incorporating a trust for the survivor rather than an absolute gift. The result is that upon the first death one half of the property will pass into the trust and can not be assessed by the Local Authority for care home purposes should the survivor be in or later move into residential care. In short, one half of the value of the property will be excluded from the means test.

The planning can also prove beneficial for the treatment of the survivor’s half share. Where an interest in property is shared between different people the value of the resident’s share will be heavily influenced by the possibility of a market amongst his relatives. If no other relative is willing to buy the resident’s interest it is highly unlikely that any outsider would be willing to buy into the property unless the financial advantages far outweigh the risks and limitations involved. The value of the interest, even to a willing buyer, could in such circumstances be arguably reduced or even considered to be nil.

Making wills in such terms is a simple and effective means of being able to plan for future care home fees.

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.