Safeguarding assets against care home fees

Wendy Scarr B.A. (Hons) TEP
0113 320 5000
wills@winstonsolicitors.co.uk

Wendy is part of our Private Client department. She is a STEP qualified solicitor and experienced at drafting complex wills, creating trusts and conducting probate work for high net worth individuals. Read more about Wendy and the wills, trusts and probate team.

It is estimated that one in four of us will be living in a care home during the final years of our life. Despite this knowledge, very few of us consider the financial implications until it is too late.

Care home fees can cost on average £36,000 per year and if you have been prudent and managed to save for your later years, own your own home or have savings, it is likely that you will be liable to pay for these fees yourself.   In a short amount of time these hard earned savings will be eroded so that there is very little left for your children to inherit.

So is there any way that you can protect your assets?

Many couples do not realise that they may be able to safeguard at least half the value of their property simply by changing the way they own their homes combined with having an made an effective will.

Most couples own their property as ‘joint tenants’ which means that on either of their deaths the property passes automatically to the survivor.  The survivor then owns the whole property and should they need to go into a care home the whole value could be used to pay their fees.  By changing the ownership to ‘tenants-in-common’ the first spouse to die could bequeath their share to whomever they like, perhaps their children or into a trust so that the survivor has the right to continue living in the property for life, then if the survivor were to need to go into a care home they could only be assessed as owning a half share of the property to pay their fees.  This effectively safeguards a half share of the property for the next generation.

Obviously, legal advice should be taken before transferring any assets not only to ensure that they give effect to your wishes but to ensure they do not fall foul of the Deprivation of Assets Legislation.  This legislation allows Local Authorities to recover assets that have been deliberately disposed of to avoid paying care fees.