Care Costs

The cost of care is a topic which has been in the news on a relatively frequent basis over the past few months. For many people, the possibility of the majority of their estate being used to pay for care fees is a very real one, particularly if they have to spend time in a care home. Whilst there are changes being brought in to help combat the cost of care, for example the £86,000 cap, the changes are only limited in their scope. The £86,000 cap will not apply to the provision of food and accommodation, nor will it apply to the payment of energy bills. The cap will only apply to the provision of personal care. This means that the majority of fees associated with care homes will fall outside the £86,000 cap.

Where a married couple, or a couple in a civil partnership, jointly own a property, it is possible, potentially, to protect half of the value of the property from care home fees. This is by making a Will which incorporates what is known as a life-interest trust. This type of trust provides that upon the first death, the deceased’s half share of the property is held upon trust for the survivor’s lifetime. The survivor can continue to live in the property and can move should they wish to, and therefore there is little impact on the survivor. Importantly, the survivor is not absolutely entitled to the half share of the property meaning that if the survivor has to go into a care home, the deceased’s half share cannot be used to pay for care fees. Upon the second death, the half share of the property owned by the first person to pass away would then pass in accordance with that person’s Will.

A life-interest trust Will can also be useful in cases where a couple are unmarried or not in a civil partnership. This is because the survivor can still live in the property, but the deceased’s share will ultimately pass in accordance with their wishes. If the survivor were to inherit the property in full, they could then benefit people that the deceased did not know, or would not wish to benefit (e.g. a new family).

For further information, please contact our Private Client team on 01394 279636 or email Jonathan or Ross.

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