Your home may well be the most valuable asset you own, so what action have you taken to protect it?
Despite recent government announcements regarding reforms to the system these are only proposals at this stage and, if implemented won’t take effect for some time – possibly 2025 at the very earliest. Even then, there is proposed to still be a requirement for contributions up to £86,000 for personal care and when that cap is reached, you’ll still need to pay for other expenses such as accommodation, food and utility bills. In other words nothing has actually changed, nor should you wait to see what might occur.
You may never previously have thought about Residential Care costs. Alternatively you may know someone who has been forced to sell the family home in order to pay Care fees.
Most couples own their homes as Joint Tenants. Hence if the survivor should require residential care the whole of the property value would be assessed, and may be used to pay fees and ultimately not be available for the family.
The most popular action taken by couples is to ‘sever the tenancy’ and change ownership from Joint Tenants to Tenants in Common. The effect of this is to give an ownership share (typically 50%) to each partner. By then drafting Trust Wills, each person leaves a life interest in the property to their spouse, enabling the survivor to live in the home, or indeed another if they choose to move, before ultimately passing their share to the nominated beneficiaries (children etc).
If, in time, the survivor is assessed for residential care and they only own 50% of the property then this alone can be considered by the Local Authority. Thus £50,000 to £100,000+ worth of assets would be protected for the intended beneficiaries.
An important additional benefit of Trust Wills for couples of all ages is the protection it affords should the survivor re-marry. Simple Mirror Wills are ideal for many, however they allow the survivor to draw up a new Will and leave all acquired assets to whomever they wish.
Whilst it may be something you don’t really want to think about, especially if you are in good health, this is exactly the time when you really should consider taking action.
Long Term Care
About 1 in 3 women and 1 in 4 men go into some sort of care. Statistically there is a greater than 50% probability that, for a couple, at least one party will require care.
With an aging population these figures are sure to rise in the future. Average Residential Care Home fees range from £25,000 to £50,000 pa. And approx. 500,000 people are currently living in care homes
The ONS estimate that 40,000 – 70,000 people are forced to sell their homes to pay for care costs each year. Currently, anyone with capital assets above £23,250 is required to fully fund their own care
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