How do I protect my home from Care Costs?

How do I protect my home from Care Costs?

How do I protect my home from Care Costs?

We work very hard throughout our lives to buy our own homes and build up our savings for our retirement and we would all like to leave something for our children and grandchildren after we’ve gone.

However, many of us may need care in our later years and the costs involved in moving into a home could soon wipe out your entire savings and even mean that your home may have to be sold to pay for care fees. There may be nothing left for your loved ones to inherit.

What can be done?

When you enter care, you are ‘means tested’ and all of your assets are taken into account, including your home. So protecting the home is the first priority and the first step is to look at the way the home is owned. Most people own their homes jointly with their spouse and on the first death the survivor owns 100% of the property, leaving it vulnerable if that survivor eventually needs care. Simply changing the way you own your home to ‘Tenants in Common’ and putting in place the appropriate trust planning should protect the home should the surviving spouse require care.

Owning the home as Tenants in Common means each spouse owns 50% of the property (though percentages can vary according to individual needs). On first death, the deceased spouse’s share enters into trust for the benefit of the survivor, children and grandchildren or other named beneficiaries. If the surviving spouse enters care, their share is not assessed for the care costs as its value would be held as being nil.