PROTECT YOUR HOME
How Can I Protect my Home for my Loved Ones?
Care Fees – The Facts
Although we would all hope to grow old in the comfort of our own home, the reality is that some of us will need to go into a Care Home later in life, and this is before we die and before the Will comes out of the drawer. The question therefore is, what are the financial consequences for us and our families? In the Midlands region, care costs in recent years have risen on average to £1500 per week. With the average stay in a care home now being about 3-4 years, after this time the total bill for your family could be well over £300,000!!
Furthermore, according to data from the Office of National Statistics, in December 2024 the average house price in the West Midlands is £292,000. It’s a shocking situation, especially considering those most affected will be hard-working people, who have already paid thousands in tax and national insurance contributions. As it stands, anyone with property or capital worth £23,250 or more has to pay the full cost of their care. Because of this rule, it is estimated that 70,000 or more family homes are sold in the UK each year to cover the care bills.
Simply disposing of your assets will not work. What the local authority will be looking for is any signs of ‘deliberate deprivation of assets’ - whether it be signing over of a property to a relative or giving away large sums of money.
However, set up properly the use of a Living Trust would firstly remove the need for a grant of probate to sell your home. This would reduce probate fees, common delays, stress and give your family immediate control of the family home upon your death. Furthermore, a Living Trust provides more control for the family in the event of your incapacity, protection against unforeseen circumstances like divorce and creditors for you or your children, inheritance tax mitigation for your grandchildren and many other significant benefits.
Therefore, although care fees could never be the sole reason for setting up a Living Trust and it was not set up at the last minute, it may be beneficial if set-up at the right time (when care is not foreseeable or planned) for the right reasons and for the right people. As a result, many of our clients have found that the assets held within their Living Trust have been disregarded during a “means tested assessment” for care fees. The bottom line is that as a minimum, in the event of needing to enter the care system later in life, most of us would rather that our family and loved ones are in control of our assets, such as our home, and are freely able to manage our affairs accordingly, and in line with our wishes.
Finally, in written guidance from the UK Government in the Care Act 2014, they have stated that:
“Guidance provides that it would be unreasonable to decide that a person had disposed of an asset in order to reduce the level of charges for their care and support needs if at the time the disposal took place, they were fit and healthy and could not have foreseen the need for care and support”
CARE ACT 2014.
The Will Partners work closely with Solicitors who are regulated by the SRA (Solicitors Regulation Authority), to deliver our clients Living Trust work and related legal services.