Couples who have made standard Mirror Wills (or don’t have Wills) could unintentionally be gifting their home to the Local Authority. You should act now to protect your children’s inheritance.
In simple terms, a Care Fee Trust Will is where (as a couple) you each write Wills leaving your half share of the property in trust for the children or other beneficiaries but state that they cannot inherit the share while your surviving partner is alive. That half of the house is then safe from Care Cost Fees.
Should you or your partner require care in later life, your assets will be means-tested by the Local Authority to help pay for these services. This goes back to the Community Care Act of 1990, which came into force in 1993.
The Local Authority will seek to use the assets of a person until they are reduced to a lower limit of £23,250. At this point, the Local Authority will make a contribution towards the person’s care costs. The person’s assets will be used further until reaching a lower limit of £14,250, at which point (in theory) the Local Authority will take over paying the fees. In practice, a contribution may still be requested, particularly if the person wishes to reside in a particular care home.
If, for example, you are not protected by a Care Fee Trust Will and either you or your partner passes away, the full value of the house will be used in any means test calculation that they perform thus reducing any potential inheritance for your surviving family.
If you own your house jointly then the good news is that there are some legal steps you can take now to protect your hard earned assets.
Forget the myths you may have heard. There is no seven year rule and the government cannot change Care Fee Trust Wills. It also means you remain in control. Crucially, the house remains yours during your lifetime – this is just sensible planning. However, you must both act now whilst you are both alive and well.
We do not recommended that you transfer the house to the children now during your lifetime as the Local Authority would most probably deem this a ‘deprivation’ of assets and ignore the transfer.
April King can show you the correct approach to take ensuring that you remain in control at all times. Talk to April King today about Care Fee Trust Wills. Making a Will with us costs between £110 and £240 plus VAT, depending on complexity.
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