The high costs involved in moving into a care home can put a dent in your savings, meaning that your loved ones could potentially receive no inheritance, or even inherit debts when you’re gone. Our advisors can guide you on all aspects of care planning; leading you to an affordable, practical retirement solution.
things to think about…
When you move into care, you will be automatically “means tested”. This is a calculation of all your assets to determine how much you should pay.
There are boundaries and limits involved, and these vary depending on the part of the UK in which you live.
If your assets are above the upper limit, you’ll be expected to pay for all your care yourself; below this threshold, you may be entitled to financial support from the council.
Assets such as cash, stocks and shares, bank and building society accounts, PEPS and ISAs will be determined as liquid assets and will be assessed for care.
property and care fees
If you own your own home, its value will usually be counted as capital. However, there are some important exceptions to this rule, like if your partner and/or a relative aged 60+ still lives in the home. The value of the property will also be ignored if a child relative under 16 still resides here.
Whilst the council cannot force you to sell your home, your debt to them may mount up after you start making regular home care fees. Interest and legal costs are involved later down the line, which can quickly add up.
Unfortunately, a lot of people do indeed lose their property because care home fees become too much of a burden.
Legally, there are two types of joint ownership: joint equity or property co-buying. You can either own the property as ‘joint tenants’ or as ‘tenants in common’.
Under joint tenancy, the owners own the whole property together. If one dies, the other automatically becomes the sole owner. Under tenancy in common, the tenants each have a definite share in the property, with these passed down to whoever is specified in a will. Without a will, any share of the property is distributed in accordance with the rules of intestacy (dying without leaving a valid will).
The ownership type you should choose depends on your circumstances. Forethought can outline the benefits and drawbacks of each scenario in layman’s terms so you can understand the best option for you.
consequences for your partner
If one of you is taken into care, the value of your home will not be assessed provided the remaining partner continues to live there, meaning you don’t have to worry.
The other assets of the person in care may be at risk, however. This includes cash, investments and business interests. Your home is also potentially at risk if you decide to move.
Your assets are much more vulnerable in any of the following scenarios:
- One of you dies and the other, now the sole owner of the home, is taken into care
- One of you is taken into care and the other dies whilst the first is still in care
- You are both taken into care
In these instances, the value of your home will be taken into account (after 12 weeks) by the local authority. They might insist on the sale of the house in order to provide funds for care. Your other assets may also be at risk.
Don’t let the worst happen; talk to the team at Forethought for expert advice on care home fees and finance management. Arrange a free consultation by calling 01565 656 619 today.
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