The cost of care for homeowners is an increasing worry. The rising demand for care and the associated costs coupled with government reforms have resulted in homeowners with assets above £23,250 having to fund their own social care.

As a consequence of the above, families face having to sell their family home or see savings wiped out to cover the cost of care, causing concern and anguish for those affected. In response, various companies have begun marketing a variety of financial planning measures which offer the promise of avoiding the cost of care home fees.

Sally Johnson, solicitor in the Wills, Trusts and Probate department, comments:

“Caution needs to be taken by individuals and family members who buy into the promise offered by certain companies that they can help avoid paying care fees. If a decision to shelter assets is made in such a way that it can be perceived as a deliberate attempt to avoid paying care home fees, you run the risk of the local authority challenging that decision on the basis that you have intentionally deprived your estate of assets. If such a challenge is successful, it can result in the local authority refusing to continue to pay for the care of a loved one and/or seeking an order from the court to have the assets transferred back to your estate.

We recommend that where you have assets over the current capital threshold of £23,250, you consider creating a Trust that sits within your Will. By your Will you can then direct that assets held in your sole name or jointly with another as Tenants in Common pass to the Trust. Those assets are then held by the Trust for the benefit of a surviving spouse or civil partner for their life. The Trust would terminate on the death of the second spouse/civil partner and be wound up as part of the usual probate procedure.

As the assets are held by the trustees of the Trust they do not form part of the surviving spouse/civil partner’s estate. However, the Trust is structured in such a way that the surviving spouse/civil partner would still be able to benefit from the assets during their lifetime.”

There are a lot of myths that Trusts are expensive and complicated to manage. However, this is not necessarily the case. Incorporating a Trust within your Will need not be expensive. The specialist knowledge of our team at Jackson Lees can assist in providing you with the most cost effective and simplest arrangement to ensure assets, in the long term, are left to those you choose.

If you would like any more advice regarding Wills and Trusts or would like to speak to one of our specialist advisers, please click here for a call back or message us your enquiry.