Q: We have both retired recently. We have managed to pay off our mortgage and have been given a lump sum from our pension. Someone has told us that if we go into care, they will take our lump sum and when that has been used up they will take our house to pay the care fees. Surely this can’t be right? We have both made Wills leaving everything to our children, because that is what we want to happen after we have died.
A: Wills only deal with assets that people own when they die, so if there is nothing left, then the children get nothing. When someone goes into a care home, the Local Authority work out how much they have to pay towards their fees. This depends on how much money they have coming in from pensions etc and also how much capital or savings they have. If they have capital worth more than £23,250 in total (and this includes a house) they have to pay the full rate of care fees which are currently between £2-3,000 every month. The Local Authority will never leave you with nothing, and if your assets are used to meet care fees and drop to £14,250 then the Local Authority pick up the bill for care fees at that stage, so that amount is left for funeral and other costs and for your children.
Q: That doesn’t seem very fair to me.
A: If either or both of you go into a home, the Local Authority will work out how much you have to pay towards their fees. If only one of you goes into a home, the Local Authority won’t take account of the value of the house while the other is still living in it (although they will take savings into account), but if the other then dies or needs care themselves, the value of the house will be taken into account and it may need to be sold to meet fees.
Q: Can’t we just sign the house over to our children and get round the problem that way?
A: No. If someone gives their house away with the intention of avoiding care fees, the Local Authority can treat this as ‘deprivation of capital’ and the fees of the person who has signed the house over are calculated as if they still own the house.
Q: But surely there is something that can be done? We found it hard to manage when the children were young, but still worked hard to get a house that we could leave to our children, and now it looks as if it could be taken off us?
A: It is possible to protect assets, but this needs to be done in good time. By planning early, it is possible to make provision for whatever the future holds without being forced to sell your home.
If you are interested in protecting your assets you need to make an appointment to see someone with specialist knowledge of what to do. At Poole Townsend we have a team of experts who deal with the above situation. Telephone (01229) 811811 (then select option 1) and ask for Jane or Michelle. Your first appointment is free and without obligation.
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