DOES MY HOUSE HAVE TO BE SOLD TO PAY FOR LONG TERM CARE?
There once was a promise from the Government of care from the cradle to the grave. Somehow I think we can forget that one! The various media have been full recently on how elderly people are being forced to sell their homes to pay for nursing and residential care. Yes, there is provision for care through the NHS when we are sick or have an accident, but when we are older and need formal Long Term Care the response is “we will pay for your care after you have nothing left”
1 in 3 women will require Long Term care and 1 in 6 men. The reason for the difference is that generally speaking women outlive men; it’s a fact of life! It’s also a fact that women are the primary carers of men, so most men don’t
have to end up in care. By the time the men have gone there is no one to look after the women, their children may be spread around the world and in most cases are not in a position to care for an ailing parent.
The Government did recently state that some of the costs relating to Long Term Care would be paid for. This was after recommendations by the Royal Commission. But what does that really mean and how would it affect you? I fact the Government only agreed to pay certain costs relating to nursing care but not for residential and personal care costs. If you have assets over £13,000 you have to pay. This could mean from £18,000 upwards per year. Under the Community Care Act 1990 the local authority has the right by law to seize the family home, put it up for sale and use the proceeds to support your Long Term Care costs. Last year over 70,000 were taken, that’s more than 200 a day, resulting in many beneficiaries losing their inheritance.
So how can you avoid this? It is illegal to deliberately transfer your property to children or trusts if the prime motive is to avoid paying Long Term Care costs. However, it is not illegal for you and your partner to make provision in your Wills that upon death your own half share of the family assets, including the home, is placed in Trust for your children or other beneficiaries instead of passing directly to the surviving spouse. The difference is that the surviving spouse does not own the deceased spouse’s half of the house, so you cannot be said to be reducing your estate illegally.
This kind of Trust is called a Protective Property Trust. It allows the surviving partner to continue to benefit from the assets within the Trust so should the surviving spouse have to go into care, half the house will always be saved. This kind of Trust is also important for young married couples to have in their Wills, especially if they have children. Without the Trust, should one of the couple die and the surviving spouse remarries and has additional children, then the children from the first marriage will miss out on inheriting their dead parent’s half of the house.
“It’s never too early to make a Will but often too late” – Jaci
