Will Care Home Fees Wipe Out Your Children’s Inheritance?

The current position

Somewhere between 40,000 and 70,000 homes are sold each year to cover the homeowner’s care fees.  With care costs running up bills of anywhere from £30,000 to £50,000 per year, nest eggs that were built up to provide a children’s inheritance can be quickly wiped out.

How it works

If you cannot afford to pay for long term care privately then the local authority must fund your care. The problem arises when we explore what ‘afford’ means. The local authority will view it as follows:

  • If you have assets above £23,250 no contribution will be made by the local authority as you are considered able to pay it yourself.
  • Below £14,250 a full contribution will be made by the local authority
  • If you have capital between the these two figures there is a partial contribution by the local authority
  • Virtually all your income will also be taken into account

Crucially, in calculating what your assets are, your home is included unless certain other people, such as a spouse, are still living in it.

 

So the big problem comes when a widow or widower needs long term care as they are forced to sell their home to pay for it. There is of course the same problem if a husband and wife both require care.

Does this seem unfair to you?

Many of our clients tell us that this all seems very unfair to them, because it seems to penalise prudence and saving. Those who have not been careful with their money often seem get their care for free. It is often the case that two residents might be in rooms next to each other with one paying £30,000 pa and the other paying nothing. So many people are looking for ways of preventing their homes being lost if they require long term care.

Can’t I just give the house to my children and continue living in it?

Giving the home away to the children is sometimes seen as the solution, but it is not. This is because the Local Authority can look back and if they can show that this was done to deliberately avoid care fees they will reverse it. There is no 7 year rule. At a time when ALL Local Authorities are cash strapped, they will become increasingly vigilant.

There are other more compelling reasons not to give the house to your children.

  • They can sell the house without your permission
  • If they get divorced or go bankrupt or even die, your house is part of their assets and who knows what might happen
  • When they come to sell the house after your death they may have to pay capital gains tax as it is not their primary residence

Here is an example of the problem, and how we can solve it:

Fred and Hilda are a couple in their sixties with grown up children. Hilda dies after a short illness and leaves everything to Fred in her Will. Because their house is owned jointly, Fred also now owns the whole house. Some years later Fred needs to go into a nursing home and because all of the assets are in his name, his family is forced to sell his house worth £300,000 to pay for his care. Fred lives for a further seven years, during which time the net care home fees have amounted to a breathtaking £250,000. On Fred’s death the amount left for the children has been massively reduced. This problem is increasingly common with our ageing population.

Solution number 1

Fred and Hilda could have become ‘tenants in common’ so that they own half their house each instead of owning it jointly. Then, if Hilda had made a Will which left her half of the home in trust for her children, rather than to Fred absolutely, the children’s inheritance might have been much greater. This is because Fred could have lived in the house up until the time when he needed care. Then his assets would have been means tested, and he could not be said to own Hilda’s half of the house, because it is in trust for the children. So as far as the local authority is concerned Fred’s half of the house counts as his assets (and the assessed value may be very low) – but Hilda’s half of the house is protected for the children.

It could then also be argued in some cases that Fred’s half of the house has little or no value because nobody would buy half a house, which would potentially protect Fred’s half (or the majority of it) too*.

Incidentally, writing your Will in this way also protects your half of the house if your spouse remarries or goes bankrupt after your death – this ensures that your children rather than your spouse’s new step-children inherit your assets.

Solution number 2

While Fred and Hilda are both alive they decide to give their house to their children, but they do it in such a way that the house is held in trust for the children. This means the children have no right to the home until both parents have died. It also avoids any issues with Capital Gains Tax and ensures that Fred and Wilma could sell the house and move to a different one if they chose. Even if one of the children got divorced or died, the assets are protected because they don’t belong to the children.

Importantly, in the example above, when Fred goes into Long term Care, he cannot be said to own the house. Also, because the house was put into trust some considerable time ago, the Local Authority cannot say that they did this purely to avoid care home fees. The house should therefore be protected for the children, whose inheritance is £250,000 more than it would otherwise have been. As a bonus, the children won’t need to go to probate when Fred dies as his house is not part of his estate – this alone can save thousands.

Why not call us today for a free, no obligation consultation to find out how we could help you protect your hard earned assets against care home fees and remarriage.

Call 0800 0934299 today – every cloud really does have a Silver Lining!

72 Comments

  • Linda Parkinson

    29th January 2013

    My grandfather has been told that if he puts the property in his childrens name and he dies within the next 9 yrs and he needs care in this time he would have to pay the care costs and take the house off him any way is this true??

  • Steve99

    30th January 2013

    Hello Linda
    No that is not the case. If your grandfather gives his property to his children and he needs to go into care later on, there is no time limit on how far back the local authority can go. Realistically however, they have to be able to show that when he gave the property away that he had some foreseeability of care, which would be extremely difficult to do after 9 years.
    However, there are other pitfalls involved in simply gifting your house to your children. These range from the problem of one child dying, divorcing or going bankrupt while still owning a share of your property to the children or ‘throwing out’ the person owns the house. Very importantly, when the children come to sell the house there would be capital gains tax to pay on any rise in the price of the property.

    These drawbacks can be got around by transferring the property into a trust rather than into the names of the children. If you would like to know more about this please contact me on 01473 276186 or st steve@silverliningep.co.uk.

    Stephen Wilkes, Adv. Cert. in Will Prep England and Wales
    STEP Aff. Member
    Head of Estate Planning
    http://www.silverliningep.co.uk
    01473 276186

  • Steve99

    31st January 2013

    It would depend on why he had put the property in his children’s name in the first place, and care should be taken on this point to avoid deliberately depriving the local authority. There may be a range of reasons why he would want to pass the house to his children in advance.
    As far as the 9 years goes, in my opinion there is nothing in the legislation which suggests a 9 year timescale.

    Hope this helps.

    Steve

  • freda baxter

    9th June 2013

    If Hilda is about to be put in a home and jointly ownes her house with her husband when she dies what happends to her half of the house? do the government get it or her husband as per her will?

  • Steve99

    10th June 2013

    When she dies her ‘half’ of the house will pass automatically to her husband if he has survived her. But the same also applies if her husband dies first, i.e his share would pass to her. At that point it would very likely be used to pay for her care, so it might be prudent to ensure that her husband does not leave his share to her. He will neeed to sever the tenancy of the property and serve notice on her, then change his Will so that his share of the property is left elsewhere.

    Hope this helps, if you need to know any more please contact me on 01473 276186.

    Steve Wilkes
    Managing Director

  • Wendy Evans

    5th January 2015

    My husband and I made a will last year , John, leaving his half of the property to both our children, and myself having done the same. the property is jointly owned.
    I felt that my husband was changing in that his memory was faultering after he had an anethsetic for a knee replacement, and jumping forward to the future I was worried that should any of us need care, we needed to protect our children`s inheritance.
    It has taken fifteen months to get a dignosis of FTD/Alzhymers/Dysphasia, and as much as it hurts I have had to take out a lasting power of atourney for my husband, and at the time he was able to do the same for me. Should any of us fail to carry out this position, the children are next in line to take over the responsibility.
    Whay I need to know now, is with the will being as such, and the LPA in place, should any of us need to have nursing care, can the property be taken away from us to pqay for carehome fees. I am told that it may be safer to change the ownership to tennants in common, if so, with my husband deteriorating,are we now able to change jont ownership to tennants in common, and will this safeguard the whole of the property for our children.

  • Steve99

    5th January 2015

    Without knowing the full content of the Wills you made it is difficult to be specific and you should not take my views as personal advice.
    When you made the Wills, in order for your husband to have been able to leave his share of the property to the children (whether in trust or absolutely), the ownership of the property should probably have been changed to tenants in common. Without this in place, the property passes to the survivor and is therefore liable to care fees if the survivor needs long term care, as they own it. If the person drafting the Will did not advise this it may have been negligent on their part.
    Depending on the level of your husband’s capacity there are two possible solutions:
    1) If he has the requisite capacity you can both sign a mutual severance of tenance to make the house tenants in common.
    2) If he does not, you can serve him with a notice telling him that you are severing the tenancy unilaterally. This would need to be registered at the land registry, and you should seek advice on how to do this, from ourselves or others.

    Hope this helps

    Steve Wilkes
    Head of Estate Planning

  • Lucia

    3rd May 2015

    Our parental home has just been sold in England to pay for care home fees in Scotland. We know that my parents want each of their 9 grandchildren to have £3k each. Mother passed away in 2002, Dad turns 86 & after what looked like the end for him is now thriving as a Alzheimer’s patient in secure care. I suspect my father has had this illness since mother died and it does explain his behaviour. My siblings think he has some capacity but we granted us shared PoA and told me he no longer feels able to deal with his finances. I know that be wanted to protect his asset for us and he asked my sister to look after it but she declined despite being an accountant who should have known better. Can I sue he for depriving me of my inheritance by failing to discuss the matter with us and failing to put the parental home into Trust.

    I’ve proposed we release £3k for each grandchild now rather than wait until father passes by which time this relatively small sum could be worth even less. I only have I child while my 3 siblings have 8 between them and I do not contest this ‘perceived unfairness’ as it means each grandchild is receiving the same amount.

    As regards how we manage the estate I’ve proposed each of the siblings look after a quarter share and pay one quarter if the care home fees each month by DD.

    My sisters are against this idea and one of them as a millionairess has taken control of my father’s finances. I know that she has split the estate of £180k into 3 of his accounts and arranged to pay care home fees from one of them.

    My father has been assessed as a risk to himself and others and therefore may be eligible for free care.

    Please advise

    Lucia

  • Steve99

    5th May 2015

    Firstly it seems to me that it will be a long and difficult road if you decide to sue your sister for so many reasons. You should seek specialist legal advice before doing so, but on the facts presented it is difficult to see how she could be found personally liable. Transferring your father’s house while acting under an LPA would almost certainly be seen as deliberate deprivation, and it is hard to see how this would be in your father’s best interests.
    Under a Power of Attorney you do not have the authority to start giving assets away before someone dies, other for customary occasions like birthdays. You would need to apply to the Court of Protection to do this.

    Finally, if the care were being provided in England you could apply for full funding, but i have no knowledge of how this works in Scotland.

    Steve Wilkes
    Head of Estate Planning

  • Angela Fitzgerald

    12th August 2016

    My parents original will left half the house to me if one parent died and then the other half to me when my other parent died. My parents then had their will reviewed a couple of years ago and was told that that was no longer legal so the will was changed to the house being left to either one or the other of them which means they are now vulnerable to care home costs. Was this advice correct?

  • T G THOMAS

    25th March 2017

    If my wife and I enter into a ‘Tenants In Common’ agreement, what happens if I die. I understand that the house will go to my wife in total. If my wife then has to go into care will the Council take the house to pay for her fees?. I also understand that if she dies then the house will automatically be passed on as per our mirrored will.

    Thank you

    T G THOMAS
    Mr

  • admin

    25th March 2017

    While it is always difficult to comment on individual cases, i can say that if a couple’s property is owned as tenants in common, their share will pass under the terms of their Will when they die. In order to protect it against being used to pay for the survivor’s care fees, there needs to be a trust in the Will of the first to die. The tenants in common arrangement on it’s own is not enough.
    If you would like more specific advice please give us a call on 01473 358195.
    Stephen Wilkes
    Head of Estate Planning

  • Allister Brimble

    29th December 2017

    It looks like my 80 y.o Dad will have to go into care with both physical and mental issues after a massive stroke. His house has no mortgage. However, my brother (my Dad’s son), now 45 has lived there his entire life and has no savings. My brother, like my Dad has clearly had depression issues his whole life which is why he is still living there and effectively living off my Dad’s pension and his own delivery driver work. Will they take the house into account and if so what would happen to my brother if the care fee’s force a sale?

    I am not particularly worried about my own inheritance here, more what can be done for my brother.

    Thanks in advance for your help
    Allister

  • Andy Maclellan

    27th February 2020

    Your figures are so wrong. My poor mother(a nurse all her life) and saved and scrimped has had life savings wiped out and now her x council house is about to be taken. She is being charged £86.000 a year so between her savings and the house that’s two years care, it’s disgusting

  • Steve Wilkes

    28th February 2020

    Andy
    That really is a shocking amount. We to tend to look at averages and sometimes we can forget how mucb more specialised care can cost. As you say, it seems terribly unfair.

  • Rob

    20th June 2020

    Hello,
    Question that never seems to be asked or considered.

    What happens if there is a son or daughter living with the remaining parent and the parent needs care?

    Is the son or daughter has no where to go, are they likely to be on the street if the house is used as asset value towards the care cost ?

    Appreciate your feedback.

    BR
    Robin

  • Steve Wilkes

    22nd June 2020

    There is a rule regarding what’s called the ‘Occupier disregard’. This means that, for example, if your spouse or partner is living in the oproperty then it must be disregarded as part of any means test for long term care.
    If there is a child living in the property, then as long as the child is over 60 it will be disregarded. If the child is under 60 it is at the discretion of the local authority.
    It doesn’t mean that the child will be ‘on the street’. The local autority can place a charge on the property which is usually repayable after the death of the person in care. This might give the child an opportunity to purhcase whatever remains of the property at that time.

  • Robin

    22nd June 2020

    Thank you for your most courteous and kind reply.

    If I may just have a supplementary!

    What if the ‘child’ is in his/her 40’s/50’s and does not have the means to buy the property as they have spent most of their time looking after the parent?

    Many will be in this position.

    So
    1. Could the remaining parent sell the house say for £1 to the son/daughter?
    2. Would a ‘ Tenants in common’ be a possible solution?

    Once again Thank you for your advice.

    Robin

  • Steve Wilkes

    22nd June 2020

    Age UK produce a really useful factsheet for these situations here https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_property_and_paying_for_residential_care_fcs.pdf

    Selling the house to the sone or daughter could be seen as deliberate deprivation and is unlikely to avoid payment of care fees if it were done solely for that purpose.
    Becoming tenants in common would require specific advice, but would again require the child to pay a market rate for the property.
    This is only general advice and it seems to me that you may require paid for advice specific to your situation.
    Steve Wilkes

  • Abi

    7th July 2020

    My Nan has left my mums portion of her estate to go into trust for her when my Nan dies. My mum is in care. Will the money/property be used to pay my mums care fees, (currently funded by the local authority)?

  • Steve Wilkes

    8th July 2020

    This will depend on the terms and wording of the trust. In most cases the capital will be preserved but any might have to be paid to go towards the care fees. You should seek specific advice in a case like this.

  • Adele

    8th July 2020

    Hi, My dad has just passed away and was in care for 2.5 years and was part funded- My Mum and Dad jointly owned the house which is now sold and the equity is sitting in their joint account, Mum is now in warden controlled housing. There was no charge on the property for the fees, Does Mum have to pay Dads care fees from his half so she can keep her half of the equity?
    Is there a certain amount allowed that Dad can leave to Mum before the fees are paid?

  • Steve Wilkes

    10th July 2020

    Hwne your father was in care, the property should have been disregarded because your mother was living there. If there was no charge on the property then there should be no future liability.

  • Bella

    18th September 2020

    Hello.
    My mother with dementia has been in a care home for about three months now.
    She is self funding. The savings she has will run out in over a years time, at which point her property would have been sold to pay for her continued care.

    My mother always wanted me to inherit the property and she stipulates this in her will.
    I live in a rented council property. I have a chronic condition which is worsening and I am classed as disabled.
    My question is; would there be any special allowance that would permit me to live in the property, and to inherit it upon my mothers death, as is her wish? I am under 60.

    Because of my disability, my mothers property would be more suitable for me than where I live now.
    My mother would also dearly like for her grandchildren to benefit from the succession of her property,
    which she has worked had to pay for all her life..
    The house has been unoccupied since my mother has been living in the care home.

    Thank you in advance for your replies, I am extremely grateful.
    Kind regards

  • Steve Wilkes

    18th September 2020

    There is a rule that a property should be disregarded by the local authority if a person living in it is incapcitated. Usually though, you need to have been living in the property at the point where your mother went into care. You should seek legal advice about your own situation to see what may be possible. Age UK produce an excellent booklet about this here https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_property_and_paying_for_residential_care_fcs.pdf
    Sorry we cannot be of more help. This is a very common story, adn there are steps that can be taken to at least protect part of the property, but these teps have to be taken well before the person goes into care.

  • Joanne

    30th October 2020

    My mother is selling her house to move closer to me. If she gives me my inheritance after she sells her house and I buy a house with the inheritance money and have my mum live in the house as a tennant who pays rent, can the government make me sell my house that my mother has been living in and paying me rent if she requires to go into full time care for any reason ?

  • Steve Wilkes

    30th October 2020

    This is a complex situation and you would be well advised to take paid for legal advice before taking the action you suggest.
    The Car Act covers many of the rules when it comes to payment for residential care fees. The local authority would have to show that someone strongly suspected or knew they would need residential care in the future, and that avoiding paying for care must have been a significant reason for giving an asset away. Age UK’s website has some useful information too here https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/

    I hope this helps.
    Stephen Wilkes
    Director

  • Lynne Coles

    10th January 2021

    My husband and I are in our early 70s and both relatively fit. We have a 40 year old son who has never married or left home and still lives with us. My question is, if either my husband or I need to go into residential care, will our house have to be sold to pay the fees, making our son homeless?

  • Steve Wilkes

    11th January 2021

    If one of you went into care the home is usually disregarded. However, if you both require care, or if one of you dies, then the home will eventually need to be sold to pay for your care, unless your son is disabled, or at the discretion of the Local Authority. It may be that the Local Authority would put a charge on your property until you die, but at that point any fees need to be paid.

  • Ethel Robinson

    20th February 2021

    My uncle ,widower, has his will in place. A home made one but well done he has An estate of about £800,000 However, can he write “something “ but not giving anyone PoA that If he needs residential care in future his home ,about £350,000 should be sold right away and put in his pot.? If it is not all used for care how will it effect his bequests ? He has left his home to me, then other people amounts of money .If anything is left I just want everyone to receive something. Any advice welcome

  • Steve Wilkes

    24th February 2021

    I would say that in this case it is really important that your Uncle gets a Lasting Power of Attorney in place. If he loses capacity, a Deputy will be appointed by the Court of Protection. They are under no obligation to act in accordance with any note he has left, although I suppose they might decide to take it into account.
    When somebody is left a legacy in a Will which is sold before their death, the beneficary receives nothing. Your Uncle would be well advised to take this into account in his Will, which i think he should seek advice about rather than trying to do it himself.

  • fred hudson

    8th April 2021

    hi could you please give any advice on how i could save my dads house from being sold to pay for is care .he is in a recite home at the moment .and i have just had the welfare officer down and she is telling me .that i might end up having to sell dads house to help pay for is care/he as dementia by the way .but before he got really bad .he made a will stating that the house was to be left to me and my brother .my mother also said that when she died that the house should be divided.by us both .but i have not got any written proof of this .does my dads will have any impact on this ? AS THIS WAS MADE BEFORE HE BECAME ILL .AND WAS PUT IN CARE . or can my dad claim full care allowance.as he only as 18,000 in savings.any advice would be grateful .AS I HAVE WORKED HARD TO KEEP THIS HOUSE GOING .
    THANKS MR F HUDSON

  • Steve Wilkes

    9th April 2021

    Mr Hudson
    Sorry for the difficult situation that you find yourself in. A Will only takes effect when somebody dies so this will not make any difference. Usually, if somebody owns a property when they go into residential care then they have to pay for their care. There may be other options available to you, such as the NHS funding his care.

  • Alan Boardman

    3rd June 2021

    I helped to buy my parents house when they had the right-to-buy from the council in 1984, my share was approximately of the purchase was approximately 23%. As the only child I would inherit the estate. however 40+ years later I was forced to sell the house to pay for my surviving mothers care. I have a few documents showing I reduced the purchase price and a signed statement from my mother that this happened but the council have said I’m not in entitled to 23% of the sale price because my parents were the tenants and my name wasn’t on the deeds. I never expected my parent would ever go into care, is there no such thing as a gentleman’s agreement

  • Steve Wilkes

    17th June 2021

    Alan
    Although we cannot comment on the specifics of your case, it does seem to be a lesson for everybody to make sure that any agreements relating to property are legally binding.
    It may be worth you seeking legal advice to see if this can rectified

  • Rachel Easter

    27th June 2021

    Hi,5 years ago myself and my sister gave our dad money to buy his home,we went to a solicitor to buy the property and also sorted his will so that when he passes the property then belongs to us to do with as we wish.However,his health is deteriorating and mobility is poor so he wishes to go into residential care although he is worried he will be made to sell the property to pay for the care and that we will loose the money that we put forward.Is this the case please or is this less likely because we paid for the property in full and the solicitor put this in the legal paperwork?Is it worth putting the house into a trust?

  • Steve Wilkes

    28th June 2021

    This is a difficult situation if the money was given without any conditions. If somebody owns a property and they need to go into residential care, in most cases the home will be taken into account. We suggest that you initially go back to the solicitor who dealt with the matter to see if they can help. It might also be worth finding out whether they advised on the drawbacks of buying property for older people who might require care.
    If your father owns the property outright, transferring into trust at this stage could be seen as deliberate deprivation of assets and the Local Authority could disregard the transfer.
    As always this advice is of a general nature and you should seek paid for legal advice in relation to your own situation.

  • Linda

    13th February 2022

    Hello. My sister has been caring for my father since my mother died. She gave up her job to move in with him and is his registered carer. She has been living with him for the last 6 years. His health is failing and so we need to find a nursing home for him. We are worried that the local authority will make us sell the house to pay for his care. This could mean my sister will be homeless as she doesn’t have any savings to pay for a house or even rent somewhere and also deplete any savings that my mother would have intended for us children. I don’t think the house is tenants in common sadly. How would the local authority view this?

  • Steve Wilkes

    14th February 2022

    This is a diffcult situation for you all, I’m sure. Firstly you should find out whether your father might qualify for funding by the NHS (it’s not means tested). Otherwise, Age UK produce an excellent factsheet about this subject, and there is lots of other information on their site. You can find the factsheet at https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_property_and_paying_for_residential_care_fcs.pdf

  • Kitty

    18th February 2022

    My family won the lottery as a syndicate, the cheque was paid into my mums account, then split 5 ways. My brother has lived with my mum and dad for the last 10+ years. So with the lottery winnings they bought their rented home between them. My mum, dad & brothers name are on the deeds. My mum and dad have £50,000 in their joint account. And my mum has 50,000 in her own savings account, which she wants to leave us kids. My dad is now looking like he may need to go into a care home. Will my mum have to pay his fees, and what happens when the money runs out?

  • Steve Wilkes

    21st February 2022

    If somebody goes into residential care, the home is disregarded if there are still certain people living in it. If your Mum continues to live in the property, then it is disregarded for any means test.
    The same means test applies to any money on your Dad’s name, although he may be deemed to own half of any joint savings. When the money runs out the local authority have a legal obligation to care for your Dad.

  • Ruth

    1st April 2022

    My nan had to self fund her care. Is there amount that is protected?. Or does all the money/estate pay for all of the care?

  • Steve Wilkes

    4th April 2022

    The current limit, i.e the amount that is protected, is £23,250, after which you pay less on a sliding scale until your assets reach £14,250. Age UK do an excellent facstheet which explains it all https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs46_paying_for_care_and_support_at_home_fcs.pdf

  • Wendy

    19th May 2022

    Hubby and I are considering changing to tenants in common to protect our kids inheritance should one of us go into care.
    My question is this, one parent has died they receive that share in trust for when the other dies . The living parent goes into care then dies. When both parents are dead, could the council demand back dated fees from the estate left to the children?

  • Steve Wilkes

    19th May 2022

    While I can’t give specific advice without knowing the exact details of the situation, there are some general points that I can make.
    In a situation like the one above, depending on the terms of the trust, the council cannot go back and take the other half into account. There are different opinions about why that is (the surviving spouse did not own the other half / it is impossible for the council to put a value on the life interest that the survivor had in the other half) but either way, in our view a council cannot back date any fees for the other half of the house.
    As always, you should seek specific legal advice about your own situation.

  • Andrew Martin

    23rd July 2022

    My mother is currently in a care home. A charge has been taken out on her property and thus accruing payments. When the proposed limit of £83,000 cap comes into force next October will my mothers estate fall under the new cap or will it only to apply to people who go into a home after the new cap comes in?

  • Steve Wilkes

    8th August 2022

    Our understanding of the rules is that they will apply to everybody. However, with so much political uncertainty, it would be unwise to make any definite plans. a cap has been promised before and was withdrawn at the last moment.

  • Martin Langley

    22nd September 2022

    My elderly parents own and live in a bungalow with no mortgage. They have Tennants in Common in place 50/50
    My father has just been diagnosed with terminal cancer with a relatively short life expectancy. He is a full time carer for my mother who has Alzheimer’s. They have decided to immediately go into a care home so my mother becomes familiar with it before my father passes.. My question is whether we should sell the property immediately or wait until one of my parents passes to be get the benefit of the ring fenced 50% of the property value with the Tennants in common? If we sell immediately I believe the full sale value would be seen as savings with my mother and liable for care home fees. If we don’t sell until one of them passes only half of the house would be considered for care as the other half would be in trust. Can you confirm my logic makes sense.

  • Kate

    22nd September 2022

    Parents are in mid eighties and speculating what will happen if one or both need care and funds are eventually depleted. If one is in care but not the other their flat would be disregarded, when the second needs care also can the flat be disregarded a second time as my sister who has lived with them all her life is over 60 and in receipt of PIP. Can she stay living in the flat taking over payment of bills from her resources? When parents die can she stay living in the flat if flat is left to her in their will with no care fee liability? Another option is she could buy the flat at market price from them now and they continue to live there with her and helping with living costs through gifting. When they go in care they would pay fees till funds are depleted but the daughter has already bought the flat.

  • Steve Wilkes

    23rd September 2022

    Our opinion would be that the property should disregarded if your sister continues to live in it. Whether she can continue to live in the property will be a matter for your parents, or their attorney under an LPA. It is therefore a good idea to think carefully about how that might work now.
    If she buys the property from them, then that money will form part of the means test if either parent needs residential care, or even care at home.
    There is always a danger when you sell a property and then intend to live in it, especially if the new owner dies, goes bankrupt or gets divorced.

    Hope this helps

  • Steve Wilkes

    23rd September 2022

    It’s difficult to comment without more details, but in a case like this the point is not to leave the remaining assets to each other. WHether that comprises cash or property might not actually be relevant.

  • Kate

    23rd September 2022

    Thank you so much for your comments.So I assume if my sister can live in the property as it is disregarded, she can assume responsibility for paying bills from her resources once she is on her own with last parent in care? What happens on death of the parents when she inherits the flat.? Can the L.A. chase for fees then, or can she remain in the flat till she needs care or dies? Could you clarify the last point relating to the Will. I assume my parents would leave their estate to one another in the Will, then last to die passes the flat to my sister and any residual cash split between the other siblings. (There are three of us)

  • Ashley

    13th October 2022

    Hello,

    My dad has dementia and will soon need some care and I was wondering if there’s anything I can do to keep my dads property if I’ve been living there all of my life? (40 years)

    Thanks a lot for your time.

  • Steve Wilkes

    13th October 2022

    Possibly. If you are over 60 the house should be disregarded (i.e. not taken into account as part of your Dad’s assets). If you have a disability the house may be disregarded at the discretion of the local authority.
    Hope this helps.
    Age UK have produced a factsheet which might answer any other questions you have:
    https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_property_and_paying_for_residential_care_fcs.pdf

  • Tracie Doll

    19th February 2023

    Mum 4 years ago set up a Will gifting her flat to me upon death, so as long as she pay council tax ect she lives there till she dies, I’m the only child.
    Lives in Scotland, if she goes into a care home will they make her sell to pay for her care?
    My other question is she has also been to the bank transferred 30k as a inheritance gift 5months ago when she had full capacity can they take this back to pay for care, she has 10k savings?
    Hope you can give guidance as I’m worried every thing she’s worked for and wanted to pass on to me will disappear as she’s worked all her life and wanted to do this in advance thinking I will be secure for my future if anything had to happen to her?

  • Steve Wilkes

    20th February 2023

    Hi Tracie
    Unfortunately we are unable to give any advice or opinions on Scottish law as they are significanty different from England and Wales.

  • Maggie

    4th March 2023

    If my step father is in a nursing home for 3 years and then my mother, who has been living in their home, passes away, will the nursing claim back the 3 years care fees from the sale of their house or will fees just have to be paid from the date my mother passed?

  • Steve Wilkes

    8th March 2023

    Dear Maggie
    You should always seek professional advice in these matters, but in general the following applies:
    Your step-father will have been assessed when he went into care. At that time, the family home could not be taken into account because it is disregarded. This is called the occupier disregard. To be clear, this means they cannot go back three years and ask for the money, although we have heard of examples of this happening.
    From now on, the family home will no longer be disregarded. Hopefully, some planning will have been done so that your mother’s share of the property does not pass to him under her Will. For this to happen, they will have needed to own the home as tenants in common, and your mother’s Will must make separate provision for her share of the property.
    Whether it’s just your father’s share of the house that gets assessed or the whole property will depend on your mother’s planning.
    Hope this helps

  • Sam

    14th May 2023

    Hello, can you advise. My partner’s mother died who had Two children and her husband had two children from a previous marriage. The will has left the house to the 4 children equally split. The two biological sons were made executors, however the step children pushed to sell the home and move the dad in with one of them to get the money and take on his care. They did this at quick sale so 20k cheaper, they also asked for the money to be split 5 ways to include the husband. The 2 brothers (executors) said no and to keep as will stated. The house is sold and since the husband moved they are now again pushing to change the will to account for the husband. We have since found that the will has a clause to say the money won’t be released until the husband dies and the money can be used for his care. His children are again asking for a percentage of the money to release it? My question is, why was all the money put in the trust and now subject to care home fees if he would have got half? Originally the sons were due to get more percentage but it was changed 50/50 to the step kids. Also the husband got 36k in the joint account and a large wife’s pension. He is quite old 80s and has his own pension. If he was to go into care could he not use his money and just the trusts?

  • Steve Wilkes

    15th May 2023

    Dear Sam
    This is a really good example where the wording in the Will is extremely important. From what you have said it sounds as though there might be a trust of some kind in the Will, but without seeing it I cannot be sure.
    I suggest that you take advice on this matter – it should take no more than 30 minutes of someone’s time – so that you can have the Will, and the implications, fully explained to you.
    Sorry we can’t be more helpful but we can only answer questions of a general nature.

  • Barbara Rabbits

    17th August 2023

    My husband and I live in a house with my daughter,her partner and 2 children aged 6 and 8.We own 2/3 of the house.If my husband needs a care home ,will the house be classed as an asset and will my family be made to sell the house to pay for care if I need it in the future?

  • Steve Wilkes

    18th August 2023

    No it would not, because you are still living in it so it wil be disregarded

  • Daughter2

    31st August 2023

    Parent1 dies and leaves everything to Parent2. Parent2 dies and leaves everything (incl house) to children. Parent2 inherits unused basic and residence nil rate bands from spouse = max £1m limit for IHT (excluding gifts/other complications for now)

    IF Parent2 moves into care home, Daughter1 currently lives with Parent1 and Parent2 so should protect house from care fees as nearly 60. On death of Parent 2, do they still get the residence nil rate band of their own and transfer of Parent1’s unused allowance when not resident at home themselves but still owner of the home?

  • Steve Wilkes

    22nd September 2023

    Yes they do, because they did at one stage occupy the property as their primary residence.

  • Hedwig Wendell-Crumb

    25th September 2023

    Father owns home outright. Father didn’t make a will. He is now in a nursing home with dementia and no capacity. Mother lives in the family home. Local authority pay for majority of nursing home fees, father’s pension pays the rest. Worried about the family home being used to pay for father’s care if mother passes away before father. What can we do the prevent this from happening?

  • Steve Wilkes

    26th September 2023

    I can see no obvious remedy here with regards to changing any Wills or trust planning. Its not clear whether anybody else lives in the property, but if a relative over 60 (other than your mother) was living in the property when your father went into care it should be disregarded.
    It may be possible to buy a bond, or an insurance product, to cover the cost of your father’s care if your mother dies before him, but you should seek independent financial advice on this matter

  • Deborah

    28th December 2023

    Hi my parents own their house and have a will In place for all 4 children to get an equal share of the inheritance, which is to include my youngest sister who passed away (leaving it to her children)
    My mum has suffered a major stroke and is now loosing her memory. My dad is her carer but is struggling to care for her. What would be the best option in this case to avoid loosing everything they have if my mum has to go into care. Many thanks for your advise.
    Deborah

  • Steve Wilkes

    5th January 2024

    We are unable to give specific advice, but we can say the following.
    When someone requires residential care the family home is disregarded if there is still a spouse living in it. This means that the local authority ignores the family home. They do not put a charge on it or anything like that. If Dad passes away or goes into care himself, then at that time they can take account of the house.
    They would take into account any savings the name of the person needing care, or their share of any joint savings.
    Hope this helps.

  • Robert

    29th January 2024

    Steve, it seems that in both solutions, the house cannot, or should not be sold until the surviving partner dies. Is that correct? If it is rented out while the survivor is in a care home, is the Council entitled to any of that rent (in each case)?

    In Solution 2, if the house is gifted to the children, then when the survivor dies, will the HMRC treat that transfer as a gift without reservation (from the perspective of inheritance tax)? Normally, they would only do this if the parents pay a market rent to the children while they live in the house?

  • Helen

    18th February 2024

    Hi, I am divorced and my adult son lives with me. He has always lived here. He is autistic and is unable to work. If I need to go into care in the future, would my house have to be sold to pay for the care, and my son made homeless? Is it worth me having some kind of trust written up to protect him? I also have 2 daughters who are independent.

  • Steve Wilkes

    19th February 2024

    Hi Robert
    I’m not too sure what two solutions you are referring to. We are getting into an area where you should take specific paid for advice, whether from us or elsehwere.
    Sorry I can’t be of further help on an open forum.
    STeve

  • Steve Wilkes

    19th February 2024

    Hi Helen
    Age UK have produced an excellent factsheet on these matters which you can read by clicking here
    Even if you form the view that your property might be safe in the circumstances you describe, you should give strong consideration to using a trust in your Will so that you don’t necessarily leave assets absolutely to an incapacitated person. You might also like to think about getting Lasting Powers of Attorney in place for yourself if you were to lose your mental capacity.
    We can discuss all of these options with you at one of our free consultations using Zoom or the phone. Please give us a call on 01473 358195 or click here and we’ll happily get that set up for you.
    Kind regards

    Steve Wilkes

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