Can you do anything to protect your estate from the potential costs of care?

Yes, make a Will!

Lynette Viney-Passig, Solicitor and Head of Private Client at Swayne Johnson Solicitors explains why there’s yet another reason to make a Will.

Clients often ask me if they should give away their home (usually to children) during their lifetime. A good solicitor should always advise against this. There are serious risks in giving away your home or an asset of this nature. Even if you trust the recipient to look after you and always allow you continue living in the property (and there are no guarantees!) things may happen to the recipient which are outside of their control. For example, if the recipient got divorced, experienced financial difficulties or died prematurely, such things would put your occupation of the property at risk.

Furthermore, did you know that if you give away an asset/money in your lifetime that the Local Authority can either ask that person to give it back or treat you as still owning it so that you can pay for the costs of your care?

The chances are that the answer to this is no.

Lifetime Gifts and Deliberate Deprivation

The Local Authority, when making an assessment for care fees can look back at any gifts you have made during your lifetime to see if you have deliberately deprived yourself of assets to avoid paying for your care. They will consider all of the circumstances at the time you made the gift and in particular whether there was a foreseeable risk of you needing care.

For example, if you transfer the legal title of your home to your children in your lifetime, and subsequently go into care, the Local Authority could ask your children to give the property back, or treat you as still owning it so that you are made to pay the higher rate towards your care costs, even though you no longer own the property. You can see that it is therefore very risky to distribute your estate during your lifetime.

So, what can you do to protect your assets?

You can make provision within your Will. There are a number of options available, one of which is a Flexible Life Interest Trust Will. You can leave your share in the family home and also any solely owned assets into Trust. Your surviving spouse will not then own these assets and they cannot be taken into account by the Local Authority when assessing fees. The entire estate of the first to die would be protected.

Your spouse can still live in the home and have the use and benefit of the Trust assets. On the death of the survivor the Trust can be brought to an end and your Trustees can sell the home and pay the proceeds to your children or other relatives, as chosen by you. This would not be possible if they have been used to pay for the survivor’s care fees.

Remember, Trusts created in Wills (or during lifetime) is a specialist area. Always seek advice from a qualified, specialist advisor.

If you would like to speak with Lynette or one her team, please feel free to contact her on 01745 818 257.