Care costs are becoming more and more of a concern with every passing year. We all want to be comfortable and well cared for later on in life and for most of us, we would prefer that to be in the comfort of our own home. But that is not always possible. Many of us will have had experience of a loved one wanting to stay in their own home but not being able to look after themselves. Many of us will therefore also have had experience of the incredibly high cost of care homes.
The frustration is understandable and tends to be expressed in the following way:-
“I’ve paid my taxes, paid into the system all of my life, why do I now have to pay for my care? I thought that my taxes would cover this?”
Anyone who has had any experience of care homes and care costs will tell you that it can be a really expensive business – in this part of the country care home fees can easily be upwards of £1,200.00 per week – and if you have even a modest amount of capital (more than £23,250.00 at the time of writing) then you will be expected to pay for your own care. Of course, this can feel incredibly unfair, especially where your home is your only (or main) asset and rather than being able to leave it to your children it has to be sold to pay for your care.
Everyone knows that if central government were to suddenly offer to cover the nation’s old-age care costs it would be an immediate vote-winner, but everyone also knows that with all the will in the world, there is no way central or local government can pick up the £100bn per year tab. And so, more often than not it falls on us to pay for our own care.
So where does this leave us? What, if anything, can we do?
If you’re a couple (it works whether you are married or unmarried, but works far better from an Inheritance Tax perspective if you are married) we can draw up a Property Protection Trust within your wills, to give some protection for your property. Instead of setting up a trust now, you use your wills to create a type of trust that, on the death of the first of you to pass away, ring-fences half of the property so that if the surviving spouse needs to go into a care home, only half of the value of the property can be taken towards care costs; the other half is shielded.
That may all sound rather complicated, but in practice it really isn’t too bad and can feel like a good way of protecting an inheritance for your children, whilst avoiding too complex an arrangement, or restricting your use and enjoyment of your home, which is really important as well.
Please get in touch with us – we’d love to hear from you, so that we can explain how all of this works in more detail.