In certain circumstances there are ways you can protect your estate from care home fees using your Will, but, this is not something you should attempt to do without advice from a professional Will writing specialist.
At Co-op Legal Services, we understand how important it is to protect your family and their inheritance and we may be able to help you put protection in place in your Will.
Many people have genuine concerns about the possible costs involved with paying for care fees in the future and the impact this could have on reducing the value of any inheritance received by the children, once both parents have died. Take the following example:
Mr and Mrs Smith were in their 60s and had two adult children. Their joint estate was worth approximately £250,000, primarily made up of their matrimonial home worth £240,000 with £10,000 of savings. They wanted to plan ahead keep matters straightforward so they put in place standard Mirror Wills. Their Wills left everything to the other when the first died and then, when the surviving spouse dies, everything goes to their children in equal shares.
A few years later Mr Smith passed away and his estate passed to Mrs Smith in accordance with the Will. Mrs Smith continued to live independently for the next few years. Sadly, Mrs Smith then suffered a stroke which meant that she required residential care. Mrs Smith was financially assessed by the local authority who determined that the value of her assets were £250,000. As this exceeded the £23,250 threshold she would have to pay the cost of her residential care in full. The residential home fees amounted to £30,000 a year and the matrimonial home was sold to pay for this. Mrs Smith then remained in the home for 5 years until she passed away. During this period she had incurred £150,000 in care home costs (5 years x £30,000) and the value of her estate at death which passed to the children was £100,000.
This is a very typical scenario and we are often asked by customers whether there is a way to protect assets through a Will so that the children get the benefit from an estate rather than it being depleted by care home fees.
The good news is that you can look to achieve this saving by using certain Trust structures in your Will. These Trusts allow your surviving spouse to benefit from your estate after you've died but, at the same time, doesn't leave your assets outright to them. This means that, if your surviving spouse is means tested, the assets held in the Trust does not form part of their estate.
You will need to be advised properly about the choices available to you and what is involved. If you own a property, you would need to know how it was owned. Not many people know that there are two ways to jointly own your home - as joint tenants or as tenants-in-common and this difference in ownership could make a big difference to the protection afforded to your property in your Will.
Joint tenancy ownership means that when you die, the legal ownership of the property automatically moves across to the other people who jointly own the property with you and it wouldn't pass in accordance with the terms of your Will.
Tenants-in-common means that you own a specific share of the property which passes in accordance with the terms of your Will.
If you are not sure how you own your property and whether you and your spouse own it as joint tenants or tenants in common, then we can do this for you as part of our Trust Will writing service.
For more information see Making a Will, Trusts and Trustees.
For initial advice and guidance about making a Trust in a Will, please call Co-op Legal Services on 03306069591 or contact us online and we will help you.