Selling the Home to pay Care Fees
A big fear of many elderly people is that their home will be sold to pay care fees. They have worked hard all their lives, and want their children and grandchildren to benefit.
So how can you protect your home from the need to pay care fees?
Firstly the value of your home must be disregarded when assessing your ability to pay care fees if your partner is still living there. It doesn’t matter what age they are as long as they are your spouse, your civil partner or you’re living together as husband and wife.
The same applies if a relative aged 60 or over or someone who is incapacitated lives in your home. However, if that person dies or moves into care, all bets are off, and your home is at risk from the need to pay care fees again. Read on to find out how to protect your home from care fees.
2) The Local Authority could choose not to count your homes value in calculating your contribution towards care fees if your carer remains in the property and if they have given up their own home to look after you even if they are not a relative. But there are no guarantees, and no need to take this sort of gamble to avoid the need to pay care fees.
3) Giving your home away to avoid the need to pay care fees before you need to go into a care home is a dangerous game which can easily backfire. If it’s done within six months of going into care, the local authority can simply transfer the debts of your care costs to the new owner and, if necessary, bankrupt them. Even if the transfer was done years before this, you may still not have escaped the need to pay care fees if the council can show that you’ve done it simply to deprive yourself of assets.
And giving a share of your home to your children to protect it from the need to pay care fees is also not safe, as it will be counted as part of their assets should they die, divorce or go bankrupt, which could mean you are forced to sell it to pay off their debts or ex-partner. Worse still, they may have an accident and need long term care. But there is a better way…
4) If you were living alone and don’t sell your home to cover care fees, the council can put a charge on your property, meaning the care bills will be paid from the proceeds when it is sold. Interest used to be charged on the debt only 56 days after the person in care died. However, new such loans are much less generous. But that is just if you leave it too late to take sensible precautions.
So how do I avoid my home being sold to pay care fees?
Firstly, you must look for a sound estate planning strategy. Just taking out a plan intended to stop your home being sold to pay care fees is rather like waving a red rag at a bull. Sooner or later it will charge! One well known provider of these sort of plans was exposed on TV as putting clients at risk by employing tactics focussed solely on protecting the home from care fees. You can’t do that, and if the intention is to avoid care fees, then your trust is wide open to challenge, which doesn’t make the trust useless – indeed, it is still worth having in most cases – but we would need details to advise properly.
To find out more about our estate planning strategy, which includes help in avoiding the home being sold to pay care fees, click the link.