Care Home Fees

Save Your Home from Care Fees with a Property Protection Trust (Protective Property Trust)

Couples who want to protect their estate to pass on to their children can set up a trust to avoid their assets being wiped out by care home fees.

The State meets full long-term care costs only for those whose capital falls below £23,250 (2010/11). People cannot be ejected from their home to pay the fee for their spouse’s care, but if one partner dies and the surviving spouse then needs to go into care, all their property and assets could be used to pay for care until only £23,250 remains.

But you can prevent care costs swallowing up all your money.

You will need to alter the basis on which you own your home and draw up a Will incorporating a Property Protection Trust.

Within this type of Will, each partner leaves their half of the house in trust for their children (or other beneficiaries) but states that they cannot have it while the surviving partner is alive.

Although the surviving partner would have full use of the half of the house in trust, they would not actually own it.

In other words, the local authority cannot get its hands on that half for care cost fees. The terms of the trust are dictated by the couple at the outset, so the surviving partner cannot be thrown out by impatient children for example.

In order for it to work, you and your partner must own your home as tenants in common.

Unfortunately, a property trust cannot help with inheritance tax planning, but it can go some way to ring fencing some of your hard-earned assets.

But couples must act now. The documents must be written while they are both alive. If they leave it for the survivor to sort out, it may be too late.

When one of you dies, the survivor continues to live in the property for life, while their partner’s share is held in trust eventually to pass to the children or whoever else they wish to leave it to, and half the house is protected by the trust for the immediate family if, for example, the surviving spouse remarries.

Everyone’s personal circumstances are different, so it is important to think carefully before setting up a Property Trust Will.