Community Care Planning

Need help understanding Care Home Fees?

There is a fine line between the legal steps required to protect your home and other assets form Care Home charges and deliberate deprivation. In a nutshell assets placed into any kind of scheme or trust in order to intentionally avoid care home fees is deliberate avoidance. But bizarrely assets held in a Trust are not included when a person is subject to being means tested.

Community Care Planning: Property Protection Trust & Care Home Fees

Could you imagine a situation where through no fault of your own you end up unable to look after yourself in your later years. As a property owner you may find yourself without any state help to finance your care and as such will find yourself at the mercy of a Community Care Order.

It is very common practice for a charge to be placed on your property so that when you die, whether you make a will or not, the charge must be repaid before you children inherit any property. If you own your property jointly with your spouse, with care homes costing an average of £1000 per week, it is possible that there could be no property left for your children to inherit.

A property protection trust in your Wills can go some way in protecting at least half of your property. If you would like further advice please call our head office

Discretionary Trusts

Another important part of a Community Care plan could be a Discretionary Trust. Most married couples like to give their estate to each other in the event that either of them pass away. But many are concerned that the surviving spouse could end up in care and their assets could easily be swallowed in care home fees. The way to overcome this could be to gift the estate to a Discretionary Trust.

The primary beneficiary of the Discretionary Trust can still be the surviving spouse but any money placed in the Discretionary Trust could be ring fenced. If the survivor did face the prospect of Community Care the money could be protected.

Property Protection Trust

Another way to protect a family home is to place a property into Trust now, however you cannot do this for the purpose of avoiding care fees. You can however do this if you have legitimate concerns over other family issues such as you are concerned that the property may not stay in the family, or you are worried that your children may become bankrupt or get divorced or perhaps they have a substance abuse problem i.e alcohol or drugs. If you placed your property into Trust for one of these reasons then this would protect the home from Care home fees. There are of course negative aspects of placing your property into Trust now, for example when you sell the property you lose the advantage of selling your main home capital gain tax free in addition you lose an element of control over the property i.e It doesn’t belong to you anymore, it belongs to a Trust. As you can see it is not all rosy and this sort of decision needs careful planning and your reasons for placing a property into Trust must be carefully documented.

If you need further advice with regards Community Care Planning then please do not hesitate to contact us.