Willenhall Based Will Writer Jim Stanistreet, from Bensonwilliams, on Protecting your Assets from Residential Care Fees

In 2022 one of my articles in the Willenhall Life and Wednesfield Magazine was on the subject of residential care fees, and it is worth revisiting some of the points made in that article as the one question which clients continue to ask more than any other is “how can I protect my house if I have to go into residential care?”

The issue is serious. Approximately 130,000 people enter some sort of care each year, residential care can typically cost between £40,000 and £50,000 per year, and currently anybody with assets over £23,250 (including their home) has to pay for their own care.

Many people try to avoid the propblem by gifting property to thir children during their lifetime, but this is highly problematical. A child could go through a divorce, go bankrupt, or die before you, all of which would leave you exposed if your property has already been transferred to them.

Also there are strict rules on “deprivation of assets”, in other words deliberately giving property away with a view to avoiding financial loss if you then need care. If your local authority believe that you have deliberately deprived yourself of an asset they can treat you as still owning that asset when assessing you for the payment of care fees!

To protect property via your Will the time to act is when a man and wife are both still alive. One of the most common types of Will we have written for married couples over the years incorporates a “property protection trust”.

This is a very simple arrangement which enables husband and wife to each leave their own half of the family home in their Will directly to their children, but subject to the condition that their spouse is allowed to remain in the home unaffected for their lifetime.

If the survivor subsequently needs care it is only their half of the property which they will be deemed to own for assessment purposes, potentially saving the family a five or six figure sum of money!

There are also a number of things which can then be done with the second half of the property, and with any cash in the estate, but these are not generic and specific advice would be needed based on individual families’ immediate circumstances.     

Understandably this subject is a major concern to many people, but planning ahead does dramatically reduce the impact it has on your hard earned assets.

For more information you can call 07789 520910 or email info@bensonwilliams.co.uk

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