Avoiding Care Home Fees
The local authority as beneficiary of your estate
Local Authorities have wide ranging powers to enforce self funding for long term care. In summary, if you have capital (including your home) of more than £23,250 in value, there is every chance that the Local Authority will ask you to pay for some or all of your care home fees should such care be needed.
There are exceptions, such as if your property continues to be occupied by your spouse. However, if a widowed spouse needs long term care and that person owns the whole of the matrimonial home, then potentially the whole of the value of that property could be taken into account by the Local Authority.
Protect your family’s inheritance
What many people miss is that there is the opportunity to protect at least half of a couple’s assets from the Local Authority by having appropriately drawn Wills. The first person to die can put his or her share of the couple’s property into trust so that the survivor can continue living in the property for life. The trust would allow a new property to be purchased at any time and for capital to be released to the survivor should it be needed. Despite this flexibility, because the survivor does not legally own the capital, this half of the property cannot be touched by the Local Authority. The arrangement can also provide protection for cash based assets if appropriate.
Review your Wills now
This arrangement only works if it is included in the Will of the first person to die. To avoid missing out on this opportunity, it is essential for couples to update their Wills and for it not to be left until it is too late.