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Care Home Fees

 Save Your Home from Care Fees with a Property Protection Trust

Married couples or partners who want to protect their estate to pass on to their children can set up a trust to limit how much of the value of their home can be used to pay for the care costs of the surviving partner.

The State meets full long-term care costs only for those whose capital falls below a certain level. Though the Government has this matter under review, it is unlikely that the final policy will deal with the “hotel” costs of care – so a property protection trust is likely to remain very relevant. People cannot be ejected from their home to pay the fee for their spouse’s care, but if one partner dies and the surviving spouse then needs to go into care, all their property and assets could be used to pay for care until only a small amount remains.

You will need to alter the basis on which you own your home in Tenancy in Common and draw up a Will incorporating a Property Protection Trust.

By means of this Trust, each partner leaves their half of the house in trust for their children (or other beneficiaries) but states that they cannot have it while the surviving partner is alive.

Although the surviving partner would have full use of the half of the house in trust, they would not actually own it.

In other words, the local authority cannot take into account the value of this half share of the home in calculating the charges it will make to pay for care. The terms of the trust are dictated by the couple at the outset, so the surviving partner cannot for instance be thrown out by impatient children.

Unfortunately, a property trust cannot help with inheritance tax planning, but it can go some way to ring fencing some of your hard-earned assets.

But couples should act sooner rather than later and, if they move house subsequently, the new home must be conveyed also as “Tennants in Common”.

 

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