Ways to prevent home being taken to fund care fees
can only assess the survivor as owning half of the property. Half is therefore safe and cannot be touched.
The local authority can have difficulty in assessing half of a house as being valued at half the full market value as in reality nobody would want to buy half of the house. Sometimes, then, all the house is safe but you can be sure that half is protected.
A life interest trust will only assist with the care home fees situation if one party of the couple dies and the other, the survivor, requires full-time care. If both parties of the couple require full-time care then they may have to sell the property. If one party requires care and the other is over 60 and remains at home, the value of property will not be taken into account.
Trusts and gifts: There are other ways in which you can plan for future care home fees without the local authority being able to challenge your action. Lifetime gifts and family trust arrangements are available but it is important to take legal advice to ensure you are doing the right thing. Often such gifts do not work unless someone cares for you or pays towards work on the property.
When gifting a property to your children, a trust document will also be needed in order to provide adequate protection. Such a gift can cause problems if that child later divorces or becomes bankrupt, as the property could be classed as being your child’s asset and could form part of the matrimonial property in a divorce or the pot to be assessed by the Trustee in Bankruptcy.
In addition, a child who owns more than one property could face a capital gains tax charge when the property is sold in the future.
You would also need to consider the element of control over your own assets you would be giving up if such gifts were to be made.
A local authority is unable to take the value of your property into account when assessing your assets if any of the following people live in the property with you:
A close relative over 60 A child or grandchild under 16 A close relative who is disabled
Overall, planning is possible and a solicitor can advise you on the best and most suitable option for your set of circumstances to protect your home without the local authority being able to reverse your actions in the future.
In addition, you may wish to consider the possibility of reviewing your will and/or having a Lasting Power of Attorney drawn up in case of future incapacity and therefore inability to handle your own affairs.”
Elaine Lightfoot is a solicitor at Ford and Warren Solicitors, Leeds.