How do I protect my home from Care Fees?

Q:  How do I protect my home from care fees?

How do I protect my home from care fees is a common question: most families would rather pass their assets on to the next generations that see them wasted away from care fees. They have worked hard and can see children and grandchildren struggling to get on or stay on the housing ladder. The situation which will only get worse with the inevitable rise from historically low interest rates.

Here are some things which will NOT Protect your home from Care Fees.

  • Giving away your home but remaining in it.
  • This means your home is still within your estate for Inheritance Tax (though you don’t own it so the money can’t come from the house).  Finding 40% of the value of your home for IHT from the balance of your estate could substantially alter who benefits.
  • It is likely to be considered as deliberate deprivation and the beneficiaries pursued for both the costs of care and of recovery.  Indeed, if you went into care within 6 months, the cost would be payable by the people you gave the house to with little trouble.
  • Your home would be part of someone else’s assets and a sale could be forced to pay their debts or divorce settlement, or beneficiaries or Inheritance Tax if they die.
  • Protect your home from Care Fees is a trust designed only and specifically to protect your home from care fees. 
  • Sound daft?  Some practitioners sell trusts designed solely for this purpose and deliberately advertise them as such (you may have see the TV programme?)
  • Waving a red rag to a bull is never the greatest of ideas – they are likely to pursue you!
  • Trusts which protect your home from care fees have other substantial advantages – contact us to find out what they are!  In most cases the cost of a trust to protect your home from care fees will be more than repaid by the fact that the property then does not require probate to be granted before it can be sold after your death.

However, you do have some protection from care fees.

1) The value of your home should be ignored in working out what you can afford to pay towards care costs if your partner is still living there. There age doesn’t matter as long as they are your spouse, civil partner or you’re living together as husband and wife.

2) The same applies if a relative aged 60 or your child under 16 over or someone who is incapacitated lives in your home.

3) The council could choose to ignore the value your home if your carer remains in it  and if they have given up their own home to look after you even if they are not a relative.

4) If your house would otherwise be counted as part of your financial assets and thus ability to pay, the Council may give you an interest free loan to pay the fees.  This loan would be secured as a charge on your home.  The charge would bear interest from 56 days after your death.  So its a great deal!

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How do I protect my home from care fees?