The question is often asked, “Is it possible to avoid paying care home fees or to at least minimise the cost.”
The simple answer to this questions is, ‘yes it is’. However, it must be understood that there a number of complexities involved. These complexities will be different for each individual, depending on their own personal situation and this is why it is always important to seek advice.
Who Has to Pay Care Costs?
To know if you can get help with care costs the local authorities will look first at your own personal assets. Let’s take as an example a couple. If they are joint owners of a home and they have joint savings if one of them needs to go into care they could be means-tested on the whole value of their home and all their savings and investments combined.
The house is in joint names and what that means is that both individuals in the couple equally own 100% of the asset. All the local authority will look at is do you have assets, including your home, worth above £23,250? If you do then you get no help at all with care costs and you will have to pay from your own savings.
Is There Anything That Can Be Done About This?
The first thing that could potentially be looked at is changing the ownership legalities of your property, so for joint owners something called Tenants-in-Common could be set up.
By turning ownership from joint to Tenants-in-Common we’re now splitting the value of the property down the middle and turning the value into a 50/50 split. Therefore, if one of you needs to be means-tested for care, they can only means-test you on half the value of the house; not the full value.
Taking It Further
That’s making progress, you are now only being means-tested on half the value of the property but your next question is then probably going to be “what if you want to protect the whole of your property or your estate?”
The bottom line is that it is not possible to protect everything and that is an absolute fact.
However, there is potential, depending on the value of the property and your personal circumstances, to be able to protect the full value of your house and ring-fence it to stop it from being means-tested for care. This is not straight-forward and will come down to some very complex questions.
However, primarily the question to be asked at the start of this process is, “Is there a need?”
The Care Act states that you are not allowed to deprive the state of care fees. However, as long as it is not foreseeable or probable that you are going to need long term care, you’re allowed to put your affairs in order.
What that means is that one of course of action you could consider is placing your property into a Trust. This would effectively ring-fence your property and it would mean that it is unlikely that you would be means-tested for any value of the property. There are other benefits to it as well but the bottom line is that is has the best potential to mitigate the circumstances in which care fees can be assessed on you.
As stated this is a complex area and the information provided here is for informational purposes only and not intended or to be taken as legal advice. To make sure this is appropriate for you please seek advice and contact us.