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Protecting Your Home From Being Used to Fund Care Home Fees

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Protect your home from being used to fund care

There has been a lot of media coverage on this subject and for most people the family home is their main asset and the concern is that it will be sold to fund care in the future. The question I get asked most from my private clients in planning their financial futures (probate and will drafting) is: “What can I do to prevent this from happening?”

A common misguided perception is that you can gift the property to your intended beneficiaries during their lifetime and this will prevent it from being sold to pay for care fees. While you could do this, this is not always effective and it exposes you to a number of risks you should consider and these risks sometimes outweigh the risk you are trying to avoid.

You may indeed run the risk of losing the property in other ways: one of your intended beneficiaries might become bankrupt and their share of the property will be acquired by the trustee in bankruptcy.  Alternatively one of your intended beneficiaries may go through a divorce and your property will be considered part of their matrimonial assets when finances are being dealt with. So in essence if you gift your property away – it no longer forms part of your assets and you have no control of what happens to it. This limits your ability to control the property and your options for the future.

What you can consider doing is putting your property into a trust. This provides an element of protection so that the home does not usually have to be sold to fund care home fees. The benefit of writing the property into a trust is that you can protect some or all of it from being used to pay for care home fees in the future – but still retain security that you have somewhere to live.