Long Term Care

In the UK, women have a 1 in 4 chance of needing long term care, while for men it is a 1 in 6 chance. It is reported that almost 70,000 homes are sold every year (200 every day) to fund people's care. And while the political parties continue debating how the problem should be tackled, we are many years from having a universal solution, so this situation goes on. The local authority has the right to force the sale of the family home and use the proceeds to fund a person's care - not surprisingly this outrages many people and is a huge cause for concern. Most people have spent a lifetime working hard to own their home in the first place and they wish to be able in the fullness of time to pass it on to their family. However the stark fact is that if you have assets over only £14,250 you will have to fund some, if not all of your care. With an average 4 year stay in care (at £500-£600 per week) costing over £100,000 - your home could really be at risk. For most couples, the family home is their major asset, hence the desire to protect it and pass it on.

A Property Protection Trust can give you protection. Couples (married or unmarried) who live in their own home make provision in their Wills to pass their half of the property, in trust, to their children. The surviving partner still remains safely in the property but the deceased's half of the property belongs to the trust. If the surviving partner has to go into care, they will be assessed to see if they should pay for care.  If they have assets of more than £14,250 in their own right they will have to pay. But only their half share of the property will be subject to open market valuation and under the current national guidelines* provided by the Government, this should have a zero valuation - the other half is owned by a trust. 

* CRAG (Charging for Residential Accommodation Guidelines 2010, amended April 2011).

Where there are assets other than just the family home, an Asset Protection Trust works in a similar way, but can protect money and other assets as well as the family home. As before, the surviving partner's residence is safeguarded and they benefit from all the assets in the trust but only hold half in their own right. 

These are simple Will trusts which can give your real protection. Why risk losing your home and family wealth to fund your care? Would you really gamble them on 1 in 4 or 1 in 6 odds? Probably not if you really stopped to think about it.

A different (non Will) type of arrangement which can provide enhanced protection for both joint homeowners and, crucially, for single and/or widowed homeowners, who have not been able to benefit in the past, is  a Lifetime Property Protection Trust.  This can afford protection during the client's lifetime against a whole range of threats to their financial security. See our separate section on this increasingly popular solution.

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