With a number of options on the table (each with rather complicated criteria and features) it can be difficult to feel confident in making a decision. Avoiding Care Home Fees – Setting Up A Trust May Help. You can read more about the savings thresholds for England, Scotland, Wales and Northern Ireland below. Reforms are underway to reduce the likelihood of anyone with ongoing care needs losing their home and all savings. All Rights Reserved. The cost of care homes depends on where in the UK you live and what type of care you need. This allows you to take money out of your home and avoid having to pay care home fees. Generally, if you did the transfer a few months before going in to care them this is likely to be seen as depriving yourself of your assets. Q I have been approached by a firm promoting tenancy in common as a foolproof method of Your local authority or council will make an assessment on whether they think you have deliberately given away your assets. This includes savings, income, and your property may be counted as capital after 12 weeks if you move into a care home on a long-term basis. Your choice will depend on your personal financial situation and preferences – but there are a few key things you’ll need to consider. With many councils under financial pressure, they are proactive in looking for cases where people are using trusts to avoid fees. It can be a shock to many people when they find out they may have to pay over £100,000 to cover their care home costs. In short, the answer to this is maybe. The value of the assets that were given away is called ‘notional capital’. Call The Care Home Fees Specialists Now. Below this, you’ll contribute with the amount based on means-testing. Can you just dispose of my assets to avoid paying nursing home costs before going into care? Beware of taking drastic action to avoid the cost of care. However Capital Gains Tax may well arise on afuture sale of the property and the local authority might seek to attack the arrangement as a ruse intended primarily to try to avoid nursing home fees as in Option 1. The task of looking after and maintaining your property may become difficult. This is different from putting your house into a trust to avoid care home fees. It is estimated that one in four of us will be living in a care home during the final years of our life. Those care home fees are, for most of us, a significant and unavoidable expense. The trust will have a set of Trustees who are responsible for looking after the rules of the Trust. The residential home fees amounted to £30,000 a year and the matrimonial home was sold to pay for this. – Where you can get financial advice to help determine how to pay your care costs. Question about your subscription? However, it will only be available if you intend to receive care at home. Unfortunately, the costs involved in moving into a Try our equity release calculator to see how much you could get. By putting your house into trust and naming someone (usually your children) as the Trustees, you no longer own your house, and should you have to go into care, your property assets would no longer be calculated as part of means testing - however, although that's the logic behind putting your house into trust, in practice it can be a bit more of a minefield. However, by giving away the ownership of your assets and, say your family home, it can leave you financially exposed in other ways, even if the person that you gifted the property doesn’t intend to do so. If you do find yourself having to find a care home, you can read more about it on this site. All funding options should be considered, and it is important that equity release is considered as part of that. Their daughter, Mrs Jacqeline Atkin approached Farley Dwek who are now seeking a refund for the £66,000 How much you can keep before paying for care, and therefore the savings threshold for care home fees, differs depending on which part of the UK you live: If you have savings and assets above this, then it is likely that you will have to pay for your care. Therefore, on its own, you cannot sell your house to avoid care fees unless you have some specific financial circumstances or if your family home has already been put in trust. They are very similar to Life Interest Trusts. These may not be in line with what you would have wanted. Paying for care home fees can become a concern for many families, especially those who face losing their hard earned savings and investments to pay for nursing home care for elderly relatives. This is essential if you have complex affairs. There are many different types of Trusts that you can use. The key to avoiding paying for care home fees and home care fees is to get financial advice as early as possible. 80 replies 5.4K views Whilst it is not a hard and fast rule if the gift was made whilst you were in good health then it is harder for the local authority to link the giving away of the asset with the aim of avoiding care fees. You also cannot put your assets into a trust purely to avoid care home costs. It is difficult to protect your home and avoid care fees unless your assets are below the threshold in England, Scotland, Wales and Northern Ireland. They are also known as ‘Property Trust wills’. Means test for care. So, in the example of giving your family home to your children, not only could you end up with the double whammy of having to pay for your care and also not having a house to fund your care costs. However, you should note that if you do enter care within 6 months of gifting your assets and property, the council can still send the bill for the care costs to the person that the gift was gifted too. Individuals will often deliberately reduce their assets, such as properly, money, and income to avoid care home fees. Many schemes will not apply once you move into a care home. Click here to find a care fees advisor in your local area. All calls are undertaken by Quadrant Estate Planning, an independent Trust specialist. Using Equity Release to avoid care home fees One option that many people look at is to use equity release to avoid paying care home fees. However, it won’t be counted if, say, your spouse or partner still lives there. If you transfer your property to trustees for them to hold on trust for you, and your intention was wholly or mainly to avoid the payment of care fees in the future, then you risk the local authority treating you as still owning that property when assessing your financial contribution to care costs in the future. Your prognosis: Is your health likely to stay the same or deteriorate? Avoiding Care Home Fees: Is It Possible? So is there a way of avoiding care home costs? Read about why you need a will and how you can make one. An advisor can help you look at your options as well as ensure you claim all of the benefits you are entitled to. Steer clear of any companies that claim they can protect your home from being sold if you go into care. If you, or a loved one, are struggling to manage at home, the thought of getting some kind of care can be stressful, not least because of the costs involved. Many years previously, and it is possible to transfer legal ownership of ‘. 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