How to Protect Your Home
Posted by: Mim ClaridgeNov06
…from care home fees
- There are approximately 11.8 million people over the age of 65 living in the UK
- 6 million are over 85 years of age.
- 421,000 over 65s are living in care homes
- 8% over 85s live in care homes
- By 2036, 1 in 3 people in parts of the South West will be over 65
Most elderly citizens are able to remain in their homes (sometimes in hospital) until they pass away, whilst those elderly citizens who do end up in care homes spend on average approximately 30 months or less as residents – an average of 15 months.
Regardless, concerns over care home fees, and how to avoid them, are nearly always one of the first questions raised by our clients, in particular; clients want to know how they can protect their homes.
What’s the problem with care home fees?
Care home fees can cost an average of £29,270 per year, or £39,300 if nursing is required. (www.moneyadviceservice.org.uk)
If a person is no longer able to remain in their own home and needs to enter a nursing home/residential home, they will be required to pay for that room unless the value of their assets is less than £23,250, and if less than £14,250, entitles them maximum financial support.
If your capital is tied up in your property, then a charge will be placed against your home to cover the costs of your care, payable when the property is sold – mostly likely after your death.
I’ve heard I should give away my home to avoid care home fees?
At Sousa Law, we would always advise against giving away your home (or a share in your home) to avoid care fees. This is for two reasons:
- You risk losing control of your home. There is always the chance that your beneficiaries could:
- Enter bankruptcy (house would form part of bankruptcy proceedings);
- Get divorced (house would form part of divorce proceedings); or
- Require the funds and sell it out from under you
- If you do give away your home (or part of it) with a view of avoiding care fees (this is known as self-deprivation of assets), this disposition can be set aside by your Local Authority, effectively leaving you in exactly the same position you were in before.
What else can I do to protect my home?
If you are single, and own your home outright:
Unfortunately, the only way is to save money and/or have other assets available to pay for your care home fees. This will not only protect your home for your beneficiaries, but also ensure that you have choice when deciding your later life residence.
If you are married/in a civil partnership when you enter a care home:
A person’s main residence will be permanently disregarded, if at the time they enter care, their main place of residence is still occupied by:
- The spouse, partner, former partner or civil partner (except where they are estranged);
- A lone parent who is the person’s estranged/divorced partner;
- A relative or family member of the person who is:
- Aged 60 or over
- Is a minor of the resident (under 18)
- Is incapacitated
Build further protection into your Will:
- Convert ownership of your property from a Joint Tenancy to a Tenancy in Common. This is easily done by ‘severing the tenancy’, the result being that you and your partner own the property in distinct shares. (contact Kristen or Louisa at Sousa Law for more information about Severing Tenancies)
- When drafting your Will, leave your ‘share’ to your partner in a Life Interest Will Trust. This means that:
- Your partner has the benefit of living in the property; and
- Your beneficiaries own the underlying capital (protecting it from care fees).
To discuss Protecting your Home or re-writing your Will, please book a complimentary, no-obligation appointment to speak to one of our specialist solicitors at Sousa Law today, on 023 8071 3060 or email email@example.com