Care Home Fee advice

We have developed the GLP Property Protection Will so that you can protect half the value of your home from care fees.

Typical Scenario

Couples tend to own a property jointly and have a basic ‘mirror Will’ that leaves the entire estate (including the house) to the surviving spouse. If the surviving spouse needs residential care, whether at home or in a care home, the entire estate (including the house) forms part of the financial assessment process.

Example:

Brian is married to Sheila and they have one son called Andrew. They have a ‘mirror Will’ leaving their entire estate to each other on the first death and then onto Andrew on the second death.

Brian and Sheila have joint assets worth £180,000 (a house worth £150,000 and £30,000 savings). After Brian’s death, Sheila will receive the entire estate worth £180,000.

If, after Brian’s death, Sheila has to go into residential care then she would be assessed as having £180,000. She would be well over the £23,250 threshold so she would have to meet the full cost of her care until her capital is reduced to this limit.

If Sheila spends a little over 4 years in a care home at £35,000 a year (£140,000 in total) that would leave only around £30,000 left for Andrew when Sheila dies.

The GLP Property Protection Will has been developed so that half the home does not pass outright to the survivor but instead passes into a Trust - with the condition that the survivor can stay in the property for the remainder of their life - so that only the half owned by the survivor needing residential care is assessable.

Example:

Using the same scenario above for Brian and Sheila only this time they each have a GLP Property Protection Will.

After Brian’s death, half the value of his home (around £75,000) is passed into Trust rather than to his spouse, Sheila, outright. Even though Sheila only owns half the house she is allowed to live there for the remainder of her life.

If, following Brian’s death, Sheila ultimately needs residential care she would be assessed as having the savings but only half the value of the house (£75,000) because Brian’s half is in a trust so is disregarded.

So on Sheila’s subsequent death, no matter how much care home fees were incurred, Andrew would inherit at least half the value of the home.

No. During your lifetime you have the right to continue living in the property. If the property is sold to purchase a new property you will have the right to live in the new property for the rest of your life. If there are any proceeds remaining from the sale you will have the right to the income that is generated.

These arrangements can be expanded to include other assets, not just property.

When planning for the possibility of long term care a trust may be suitable to ensure your children or grandchildren to be able to inherit more of your assets.

Our GLP Family Protection Trust is beneficial because:

Save money in administering your estate: A Grant of Probate will not be required to administer the property if it is determined that the property should be sold. However, depending on the other assets and value of your estate a Grant may still be required.

Enables you to pass on more to the next generation: saves your estate being eroded by the cost of residential care in later life which could cost an average of around £35,000 per year. (see Will I avoid paying care fees if I put my home and other assets into Trust)

Disputes after death: If you anticipate potential problems occurring on your death, dealing with your property now by use of a trust may be desirable. A Trust will also give peace of mind knowing where the property will pass on your death.

Our specially developed GLP Family Protection Trust gives you the flexibility to:

Retain your right to live at home: If you put your home in the trust you can continue to live there for the remainder of your life.

Retain a right to income and discretionary capital payments: If your home is sold and the proceeds invested or your home is rented then you are entitled to receive any income generated. The trustees can make capital payments to you.

These arrangements can be expanded to include other assets, not just property.

A trust is a legal arrangement where you give cash, property or investments to someone else so they can look after them for the benefit of a third person.

If you put assets into a trust then they no longer belong to you. They are not owned by the beneficiaries either - so they cannot do what they want with the assets. Instead, it belongs to the Trustees who manage the assets and distribute the cash.

The benefits of our GLP Family Protection Trust are:

Save money in administering your estate: A Grant of Probate will not be required to administer the property if it is determined that the property should be sold. However, depending on the other assets and value of your estate a Grant may still be required.

Enables you to pass on more to the next generation: saves your estate being eroded by the cost of residential care in later life which could cost an average of around £35,000 per year.

Disputes after death: If you anticipate potential problems occurring on your death, dealing with your property now by use of a trust may be desirable. A Trust will also give peace of mind knowing where the property will pass on your death.

Our specially developed GLP Family Protection Trust gives you the flexibility to:

Retain your right to live at home: If you put your home in the trust you can continue to live there for the remainder of your life.

Retain a right to income and discretionary capital payments: If your home is sold and the proceeds invested or your home is rented then you are entitled to receive any income generated. The trustees can make capital payments to you.

Inheritance Tax (IHT)

Inheritance tax should neither be saved nor increased by transferring your home into a Family Trust. It is not part of a tax planning scheme.

Capital Gains Tax (CGT)

There should not be any CGT payable upon the transfer of your home into the Family Protection Trust. This is because the principal private residence exemption to CGT applies to entry into Trust. However if you cease to live there and then it is sold there could be CGT to pay.

If you have gifted assets into a trust when you are fit and healthy and do not foresee any need for care and support then it is extremely likely these assets will be disregarded.

However, if the local authority believe you have transferred assets into trust to avoid paying care fees it is known as deliberate deprivation of assets. They can recover the asset from the person you transferred it to or count you as still having the asset(s) and therefore being able to pay the fees. If you do not pay, they could take legal action and pursue you for the debt.

Before putting assets into trust we can advise you on the likelihood of the Local Authority challenging the trust.

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How do I get NHS continuing healthcare?

To be eligible for NHS continuing healthcare you must:

• have ongoing significant health needs, and
• require care primarily because of the nature of your health needs

There is an initial screening checklist which you must meet before being referred for a full assessment of NHS continuing healthcare.

A multidisciplinary team (MDT) will complete a full assessment and consider your needs under the following headings:

• breathing
• nutrition (food and drink)
• continence
• skin (including wounds and ulcers)
• mobility
• communication
• psychological and emotional needs
• cognition (understanding)
• behaviour
• drug therapies and medication
• altered states of consciousness
• other significant care needs

These needs are given a weighting marked "priority", "severe", "high", "moderate", "low" or "no needs".

If you have at least one priority need, or severe needs in at least 2 areas, you can usually expect to be eligible for NHS continuing healthcare.

You may also be eligible if you have a severe need in one area plus a number of other needs, or a number of high or moderate needs.

Is there a Fast-Track procedure?

If you have a health condition that is getting much worse quickly, and you are near the end of your life, you may be eligible for the CHC fast-track pathway so you can get treatment and support as urgently as possible.

What happens if the application is rejected?

If the person’s application is rejected at the initial assessment they can ask for it to be done again or for a full assessment. If it’s rejected at the full assessment stage, they can ask for a review. You may need to instruct solicitor to assist you.

What happens if I’m not eligible for NHS continuing healthcare?

If you're not eligible for NHS continuing healthcare, but you're assessed as requiring nursing care in a care home (in other words, a care home that's registered to provide nursing care) you'll be eligible for NHS-funded nursing care.

Contact us   for a free initial consultation