The short answer is yes. If you own a home, it is likely that you will need to pay for your own care home fees. If you own assets worth more than £23,250 (including your home), you may be required to self-fund your care, which would involve selling your home or having a charge placed against it by the Local Authority. You continue to pay for care until you have less than the lower threshold amount of £14,250.
“I will never go into a care home”
It is generally the case that as your care needs become more pronounced, you may at some stage need to move into residential care. And beware: Without a Lasting Power Attorney in place, this can happen without your consent, or the consent of your family… see Lasting Power of Attorney (LPA) Services | Maplebrook Shropshire (maplebrookwillsshropshire.co.uk)
Can I stop it from happening?
There is the option to put your home into a Trust, which will ensure that your home (and other assets) pass on to the next generation, instead.
What is a Trust?
A Trust is a legally binding relationship where the legal ownership of property is entrusted to other persons – and these persons are duty-bound to use the property for your benefit. A new Trust can be formed specifically for your house.
So who owns my house?
The Trust itself becomes the legal owner of the property, responsible for its maintenance and any people that benefit from it. The Trust includes legally binding instructions on how the Trust should be managed. Decisions are then made by ‘trustees’ (bound by the instructions), who are the people that run the Trust. Each Trust must have at least two trustees, one of whom can be you, so you stay in control.
Why would I put my house in a trust?
One benefit of a Trust is that it protects your property from being seized by the local authority to pay for long term care requirements. Trusts also allow you to pass your assets over a longer time period than a Will, so it ensures that your loved ones receive your assets in exactly the way that you want, at the right time. (For example, if you die when your beneficiaries are under 18, they would not be able to own and manage a house without a Trust.) It doesn’t have to be a house; if you own a valuable painting or a narrowboat, then you could put this into Trust.
What happens when I die?
You decide! The Trust includes instructions about what you want to happen. The Trust either continues (say if you leave a surviving spouse still living in the property), or otherwise, the property could pass to your beneficiaries. You state your wishes – these become legally binding. So, you have peace of mind that your wishes will be carried out for up to 125 years after your death!
Trust in a Trust
Timing is a factor. If you have ‘foreseeable’ care needs, Trust planning becomes too late. The problem with waiting to create a Trust until you need care is that the Local Authority may see this as “deliberate deprivation” and still include the property value in your needs assessment. So, if you want to protect your assets with Trust planning, don’t put it off. It is never too early, but it does get too late!
For a free and impartial chat about your options, please give me, Helen, a call: