EPO Care

Using Wills and Estate Planning to protect your assets

Through careful use of your Will and planning how you use your assets you can prevent a large portion of them from being swallowed up paying for care home fees.

For example, a provision in a Will concerning a house owned jointly by a husband and wife could protect half of the value of the house and ensure that you retain the use of the money. If one spouse needs care in a home whilst the other remains in the matrimonial home then the value of that property will probably be ignored by the Local Authority in any financial assessment (be it due to the fact that the spouse remaining in the property is aged over 60, or that the Local Authority have exercised their ‘financially dependent relative’ discretion to ignore the property). A common problem occurs when one spouse dies leaving the other requiring care in a home, as then the house will be empty and the Local Authority will take its value into account. One solution is for new Wills to be made in which the husband and wife do not leave each other their share in the matrimonial home. Instead, the deceased’s share of the property would be held on trust for the survivor, protecting their right to occupancy but removing their claim to ownership of that share. When the surviving spouse then vacates the property (for example when moving into a care home, or in the event of their death) the Executors of the first spouse’s Will would pay the proceeds of sale to the ultimate beneficiaries of the Trust, for example children of the family, instead of it having to be spent on care home fees.

Alternatively, you may wish to transfer property into a lifetime Family Trust whilst both husband and wife are still alive, which may remove it from any potential Local Authority assessment of your capital. In this case, your house would be transferred to a Trust, which would be set up so as to allow you to continue living there whilst also specifying who will ultimately gain ownership of it, for example your children. Until such time as the beneficiaries are entitled to take possession of the house it will be held by Trustees in their name. The Trustees will protect both your lifetime interest in the property and also the interests of the ultimate beneficiaries. If you wish us to, we can act as independent Trustees for you. By transferring your property to the Trust you will relinquish ownership and it may not count towards any assessment of capital by the Local Authority. Simple gifts of assets to other people would also achieve the same result.

However, you should seek advice before transferring any of your assets to another person to ensure that you do not fall foul of the rules on deprivation of capital; it is against the law to deliberately dispose of assets solely for the purpose of avoiding care home fees. If the Local Authority believes that someone has deliberately depleted their capital in order to obtain public funding which they would otherwise not be eligible for (i.e. by taking themselves under the capital threshold where the Local Authority starts to contribute to their care) then they can assess that person as still having the value of the assets they gave away, which in all likelihood will result in them paying the full cost of their care anyway whether they go under the capital limit or not. If the gift is made within six months of the person moving into a care home, the Local Authority may seek repayment from the recipient of the gift. However, this six month limit does not mean that they will not look back further than that to previous gifts and take those into account. Therefore it is very important that you seek advice about the situation, as there must be some good reason behind the disposal of your assets for the Local Authority to ignore it in any potential assessment. It is also vital that the disposal is carried out correctly with the relevant formal documentation completed and registered.

If you think that you need to update or write your will, or if you would like advice about other aspects of estate planning, come and see our very experienced Senior Director Kerry Osbourne, who will advise you properly and fully for a modest fee. He can come and see you if you can’t make it to our office in Sutton Coldfield. Call him on 0121 686 9444 or email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it and ask for an appointment. He also prepares Powers of Attorney and registers them for you, and is happy to attend you at home or your Care home if you have mobility difficulties.