The average cost of care in a residential setting can range from £29,000 – £39,000 a year, and with nursing care fees ranging from £35,000 – £55,000 people now more than ever are looking at ways to protect their assets. The average stay in a UK care home is between three to four years, meaning that there is the potential of a person having to fork out up to £220,000 in care home fees. This means that there may be little left in your estate to leave to your family and loved ones.
There are currently ways to ring-fence part of your estate against the hefty burden of care home fees through careful planning in your Will.
When do I pay care home fees?
The current threshold for care home fees is £23,250. This means that if you have assets exceeding this amount, you will be considered a ‘self-funder’ and you will be expected to contribute to your own care. If your assets drop below this threshold, you may be eligible for help with funding your care.
What can I do to protect my estate?
Careful planning in your Will can help protect some of your assets being used for care home fees. This entails setting up a trust to allow your surviving spouse to have the benefits of your estate without owning your assets. These types of Wills are often called Life Interest Trust Wills, Care Home Fee Planning Wills or Asset Protection Trusts.
Life Interest Trusts allow you to confer benefits onto someone so that they may be given rights over your trust assets during their lifetime. In the event of your death, you will have specified in your Will where the trust assets are to go. In most cases, this is to your children. The way the trust is set up means that the life tenant (the person benefiting from the trust) does not actually own the assets. This can be, for example, your property. As they do not own the assets, their value will not be taken into consideration when the local authority assesses you for care home fees.
This area of law is complex but can be highly beneficial if you are seeking to protect some of your estate and plan for the future. If you are interested in this type of Will Planning or have any further questions, please contact us to speak with one our specialists.
