Protecting property from care home fees
Discussion
Hi, I am recently retired and my wife and are are starting to think about planning for the future. We’ve looked at IHT and think we should be just below the current limited so not too concerned there.
We are concerned that should one or either of us need to go into a care home at some future date our home might potentially need to be sold to cover fees. My question therefore is, is there a way to protect our assets and home from being used to fund fees so that our children receive the maximum benefit upon our ultimate demise?
TIA
We are concerned that should one or either of us need to go into a care home at some future date our home might potentially need to be sold to cover fees. My question therefore is, is there a way to protect our assets and home from being used to fund fees so that our children receive the maximum benefit upon our ultimate demise?
TIA
I have paid for some advice on this matter. Regarding my mother who is now in care. In her case there are no viable options. There may be some depending on your life expectancy and family, kids etc. I do suggest you take official advice from a qualified professional. You don't want to get into any of the evasion schemes badged as avoidance. It's a very hot area with an increasing amount of prosecutions .
The short answer is no.
The long answer depends on your overall asset breakdown and if you can do something with your liquid (non property) assets with regards to Trusts etc that may protect capital from this but still give you some access (typically as a fixed regular withdrawal).
Whatever you do DON'T try and do anything with your actual home itself as I've seen scenarios that make the problem worse not better. I'm an IFA by the way. I don't take new people on so can't help personally but PLEASE take professional advice on any asset planning and not from random Internet strangers.
The long answer depends on your overall asset breakdown and if you can do something with your liquid (non property) assets with regards to Trusts etc that may protect capital from this but still give you some access (typically as a fixed regular withdrawal).
Whatever you do DON'T try and do anything with your actual home itself as I've seen scenarios that make the problem worse not better. I'm an IFA by the way. I don't take new people on so can't help personally but PLEASE take professional advice on any asset planning and not from random Internet strangers.
If you’re decades away from needing a care home, you can gift your children the assets now, and pay them rent to live in their newly acquired house - but your life is in their hands (goodwill).
Councils have got real wise to people trying to avoid paying their own care costs when they are in a position to pay up, so most loopholes will be closed off.
One sure fire way to avoid fees is for your children to take care of you and your partner (when your old and frail), and not enter a care home.
Councils have got real wise to people trying to avoid paying their own care costs when they are in a position to pay up, so most loopholes will be closed off.
One sure fire way to avoid fees is for your children to take care of you and your partner (when your old and frail), and not enter a care home.
Wilmslowboy said:
If you’re decades away from needing a care home, you can gift your children the assets now, and pay them rent to live in their newly acquired house -
Just hope they (the kids) don't get divorced - they might have to sell your house!In reality, only a very small percentage of people go into care, and they usually only stay a short time. A bigger issue might be paying for care at home.
Wilmslowboy said:
If you’re decades away from needing a care home, you can gift your children the assets now, and pay them rent to live in their newly acquired house - but your life is in their hands (goodwill).
I thought that was a no-no? i.e. you can't be living in the property if you gift it to your kidss111dpc said:
Hi, I am recently retired and my wife and are are starting to think about planning for the future. We’ve looked at IHT and think we should be just below the current limited so not too concerned there.
We are concerned that should one or either of us need to go into a care home at some future date our home might potentially need to be sold to cover fees. My question therefore is, is there a way to protect our assets and home from being used to fund fees so that our children receive the maximum benefit upon our ultimate demise?
TIA
Buy it from you now at full market value?We are concerned that should one or either of us need to go into a care home at some future date our home might potentially need to be sold to cover fees. My question therefore is, is there a way to protect our assets and home from being used to fund fees so that our children receive the maximum benefit upon our ultimate demise?
TIA
How much savings do you have?
If either of you need care either at home or in a care home then the local authority won't pay until your individual savings are below £23,250 and at over £1K per week for care that goes very quickly. As a married couple you would have to apportion how the savings are divided which determines who pays and when.
There are many combinations where one or both are alive and could be receiving no care, care at home or care in a care home but if at least one of you is living in your own home even if receiving care at home the local authority won't go after your house to pay for care even if your savings are below £23,250.
Once both of you are not living in your own home the local authority will go after your home to pay for care until your individual savings are below £23,250.
Your best plan is for the survivor to receive care at home up to end of life. Once palliative hospice care is required then this is funded by the local authority.
When considering IHT what allowance have you come up with? As a married couple if you are leaving your main residence to direct decedents you could be entitled to the £1M inheritance tax threshold.
Sorry if too brutal.
If either of you need care either at home or in a care home then the local authority won't pay until your individual savings are below £23,250 and at over £1K per week for care that goes very quickly. As a married couple you would have to apportion how the savings are divided which determines who pays and when.
There are many combinations where one or both are alive and could be receiving no care, care at home or care in a care home but if at least one of you is living in your own home even if receiving care at home the local authority won't go after your house to pay for care even if your savings are below £23,250.
Once both of you are not living in your own home the local authority will go after your home to pay for care until your individual savings are below £23,250.
Your best plan is for the survivor to receive care at home up to end of life. Once palliative hospice care is required then this is funded by the local authority.
When considering IHT what allowance have you come up with? As a married couple if you are leaving your main residence to direct decedents you could be entitled to the £1M inheritance tax threshold.
Sorry if too brutal.
s1962a said:
I thought that was a no-no? i.e. you can't be living in the property if you gift it to your kids
You need to be paying them market rate rent, subject to periodic (annual ?) reviews. Even then it's subject to scrutiny, so good records will need to be kept.Gift with reservation of benefit is the term to Google.
Partly driven by my FIL's final year at home and the difficulty of coping with that we've modified our house to have a downstairs guest suite, inc a wet rooom, so, if needs be, we should be able to stay here for longer than in a conventional house. We thought about adding a lift but settled on the downstairs bedroom instead.
We did look at moving to a bungalow but couldn't find anything suitable and Mrs S really didn't want to leave the immediate area.
We did look at moving to a bungalow but couldn't find anything suitable and Mrs S really didn't want to leave the immediate area.
My understanding is that even with the first person, if applicable, the care home fees will be 'loaned' with a charge against the property. They just won't evict the second person who can live there for the rest of their lives and the fees then settled from the eventual estate.
I would imagine the second person not being the beneficiary would trigger an early repayment ?
I would imagine the second person not being the beneficiary would trigger an early repayment ?
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