In an aging English society, people are becoming more concerned about how to fund senior or elderly care. Elderly citizens are required to provide for their care costs when their health conditions require residential or nurse care. Some of the elderly have even been forced to sell their homes to fund care costs, leaving their children with no home inheritance.

Rising Cost Of Care

In recent years, care fees have been steadily rising. Those who have at least GBP£23,250 in property or personal savings, and who require to be placed in residential care, are seeing their hard-earned money spent for care costs. 

The average cost of staying in a care home has increased to GBP£30,926 per year. This is an increase of GBP£1,536 or about 5.6%. Compared to the average increase in pension of around GBP£156, it would amount to more than a tenfold increase in care costs.  

On average, pensioners receive an annual income of GBP£14,456. This would only be enough for about six months’ stay in a care home. It would be short by GBP£16,470 each year, which rounds off to a deficit of roughly GBP£317 a week.

Avoid Having To Sell Your Home

In the United Kingdom, your home and other assets would be used to fund care should it become necessary. Thus, you should know how to protect your assets. There’s a way for elderly couples to protect a large portion of their assets from being used for care fees. One suggestion in and similar sites is to write a will to protect your home from care costs. 

What some people do is they give away their house to remove it from the reach of being charged for the payment of care fees. But when you give away assets or place them into a trust, and you’d be doing it for the purpose of avoiding care fees, this will be deemed as a ‘deliberate deprivation of assets.’ If you do this, social services will still include all your assets (including the ones you gave away) when they do their assessment.

Ways To Fund Care

In the UK, most couples own property as ‘Joint Tenants.’ When one dies, the house is automatically passed on to the surviving partner. When the surviving spouse also dies, the house is then passed on to their children. If the surviving spouse lives long into old age, they can sell the house to pay for their own care. This leaves the children with nothing.

There are lawful ways for couples to protect their homes from being used to fund care. To avoid this, many couples make a Mirror Will in which they leave their entire estate to their partner. Another option is writing a Care Fee Trust Will instead. A key feature of a Care Fee Trust Will is it allows the surviving spouse lifetime use of the deceased partner’s share. When only the children are left, your properties are then passed on to them, and then to your grandchildren.

In a Care Fee Trust Will, the family home is held by the couple not as joint tenants but as tenants in common. As tenants in common, each spouse owns half of the house. They don’t own the home jointly in a single indivisible share as they would if they were Joint Tenants. 

During their lifetime, your spouse is permitted to use the share of the home which pertains to you. They may also transfer house with the permission of your trustee. The best feature of this will is that should the need of your spouse for care ever arise, local authorities can’t appropriate your share and subsequently sell it to pay for care fees. Your spouse doesn’t own your share and isn’t allowed to sell it.

After one of the couples die, and the surviving spouse has to go into residential or nursing care, the half share of the spouse who was first to die won’t be taken into account to assess whether the surviving spouse can get state support.

Even if the surviving spouse spends a lot of time in residential or nursing care, the half share of the house proceeds which belongs to the first to die will be preserved and won’t be lost to home care fees. This kind of arrangement doesn’t fall under ‘deliberate deprivation of assets’ since the surviving spouse receiving care didn’t give away any assets to avoid paying for home care fees. 

Caring For Elders While Preserving Inheritance

Most people work their whole lives hoping they’d be able to save up enough assets or properties such as a home, which they can pass on to their children as an inheritance. But when they fall ill or go into old age, or due to other unforeseen circumstances, they’re forced to sell their homes to pay for a loved one’s care fees.

Couples who own their own property should thus seriously consider putting protection against home care fees in their wills. There’s a way for you to care for elders while preserving the children’s inheritance, as discussed in this article.