Care Fees and the Family Home
With people in the UK now living longer and the average life expectancy reaching 79 for males and 83 for females, an increasing concern among many is the rising cost in care.
The family home is often the biggest worry with many people feeling anxious that their home would have to be sold in order to fund care fees in the future. It is often considered that the best thing to do would be to transfer the property into the name of a third party such as a child, to avoid the value of the home being taken into consideration. Unfortunately, as with most things, this is not as straightforward as it seems!
At the point you require care, the Local Authority will undertake a financial assessment which looks at your capital assets as well as your income so that they can assess how much you can afford to contribute towards the cost of your care. If your assets total more than £23,250 then you will be required to pay the full cost of your residential or nursing care.
Transferring a property to a child could cause a number of problems especially if that child were to divorce or become bankrupt in the future, because the value of your home would be in their name which would hugely affect your security to remain in your own home.
The Local Authority can look into what has happened to the ownership of the family home and ask questions around any transfer of ownership. If they are not satisfied with the reason given for transferring your home out of your own name and believe that this has only been done in order to avoid paying care fees, they will conclude that this was a ‘deliberate deprivation of assets’ and will include the value of your property in their financial assessment, whether it is in your name or not.
However, it is not all bad news! The value of your home will be disregarded in the financial assessment if it is still occupied by:
- Your spouse or partner
- Your estranged/divorced partner if they are a lone parent with a dependant child
- A relative who is aged over 60 or incapacitated
- Your child who is under the age of 18
We can help with care fees planning through the use of Family Protection Trust Wills for couples, which can protect up to half the value of a jointly owned property from exposure to care fees.
If you would like to discuss care fee planning further or perhaps review your Wills or Lasting Powers of Attorney then please get in touch with Kirsty Thistle or one of the team, at any of our four offices.