Can I transfer my property to my children to avoid paying care fees?
Most of us may never need residential care in the future, however many clients ask us for our advice on how they can protect their assets from being used to fund residential care in the event that they required care in later life.
Depending on the individual estate, gifting of certain assets may be appropriate for other measures such as tax planning, and we would therefore always recommend that you discuss gifting of assets with a legal professional. Our Will Writers offer bespoke advice tailored to your situation
Can I gift my assets to my children?
A question we often get asked is whether clients are able to gift their assets away to their children to avoid this asset being taken into consideration if they required residential care. Giving away assets (including putting them into a trust) with the intention to avoid care home fees can be referred to as a deliberate deprivation of assets. A common misconception on this gift is that you can make the gift, as long as you survive the seven years afterwards. Unfortunately, this is not the case. If you require residential care in the future, social services will assess your assets and there is no time limit as to how far back they can enquire. This means that your financial eligibility will include the assets you still have and any assets you have given away, no matter how long ago. Ultimately, the gift would fail and the property can be clawed back into the estate for the financial assessment.
What happens if I gift my house to my children and our relationship breaks down?
Another problem that you could face is the relationship breakdown between you and your children. Whilst many clients tell us that it would never happen to them, if you have transferred your property to your children and your relationship with the recipient breaks down, you could find yourself in an extremely worrying and vulnerable position. This could also happen if they were to die, are declared bankrupt or get divorced (the property could be taken into account in the matrimonial pot to be divided between them and their spouse).
How can I avoid care home fee avoidance scams?
Be cautious with “too good to be true” companies. You should always be cautious when dealing with companies who seem “too good to be true” and ensure the company you are dealing with are regulated by the Solicitors Regulation Authority and hold a professional indemnity insurance to protect you as a consumer if anything goes wrong.
“Our Solicitor was so approachable and friendly. She made the whole process easy. We would definitely use HSR again, and if possible Kelly, for any other legal needs. Thank you very much for making our Will writing a pleasant experience, as we were dreading it. We should have come to you ages ago!“ – Sarah Furniss left on ReviewSolicitors
How HSR Law Can Help
Our Will writers can give you advice as to the best way to mitigate care home fees within your Wills, and this is often to incorporate something called a Life Interest Trust in the Wills of both spouses. This would mean that after the death of the first spouse, if the survivor had to go into residential care, the half share of the first to pass away does not get taken into account in the financial assessment of the survivor. In simple terms, social services cannot use the first half share of the property to pay for the survivor’s care. Of course, the survivors own half share can still be taken into consideration, however you are still protecting 50% of the property worth no matter how long the survivor is in care for.
This mechanism would not be seen as a deliberate deprivation of assets as the half share of the property is held in trust for the first spouse’s beneficiaries. This mechanism is an effective way to ensure your beneficiaries still inherit something from your estate, however they do not legally own half of the property so they cannot force a sale of the property, the property cannot be taken into account in financial settlements or bankruptcy and the survivor has a home for the rest of their life without the worry of being forced out of the property by the interested parties.
If you wish to enquire more about Life Interest, Trust Wills or Wills in general, please do not hesitate to contact our Will writing team who can give you more information on the same. Please contact us for more details or to arrange an appointment at any of our offices. Home visits may also be available for those who are unable to travel to an office.
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Planning For Future Care Costs FAQs
Planning for future care costs can feel overwhelming, and many people have similar questions about protecting their home, savings and family inheritance. Below, HSR Law answers some of the most common queries about estate planning, care home fees and trusts to help you make informed decisions about your future.
A Life Interest Trust is a legal arrangement that allows someone to benefit from assets during their lifetime while ensuring those assets ultimately pass to other chosen beneficiaries. It is commonly used in wills to protect family assets and provide financial security for a surviving spouse or partner.
A Life Interest Trust can allow a surviving spouse or partner to remain in the family home or receive income from investments, while preserving the underlying capital for children or other beneficiaries. Depending on your circumstances, it may also form part of a wider estate planning strategy to help protect your estate for future generations.
HSR Law can advise whether a Life Interest Trust is suitable for your needs and ensure your wishes are clearly reflected in your will. Contact HSR Law today for expert estate planning advice and tailored guidance.
Giving away your home to avoid paying care fees is not usually an effective strategy. If a local authority believes you deliberately transferred your property to reduce your assets and avoid care costs, it may treat the asset as though you still own it. This is known as deliberate deprivation of assets.
Whether a transfer is challenged depends on factors such as your health, age and whether the need for care was reasonably foreseeable at the time. Every situation is different, so it is important to seek legal advice before making significant financial decisions.
HSR Law can explain your options and help you plan your estate in a way that complies with the law. Contact HSR Law today for tailored advice on protecting your assets and planning for the future.
A trust may help protect certain assets as part of a wider estate planning strategy, but it does not guarantee that your assets will be protected from care home fees. The effectiveness of a trust depends on the type of trust, when it was created and your individual circumstances. It is important to avoid arrangements that could be viewed as an attempt to avoid paying for care, as these may be challenged by the local authority.
HSR Law can advise on whether a trust is appropriate for your circumstances and help you put in place a legally sound estate plan. Contact HSR Law today to discuss your options with an experienced member of our Private Client team.
Deliberate deprivation of assets is when someone intentionally reduces the value of their estate to avoid paying for care home fees. This can include giving away money, transferring property or selling assets for less than their market value.
If a local authority decides that assets were deliberately disposed of to reduce care costs, it may still include their value when assessing your ability to pay for care. Careful estate planning should always be carried out with expert legal advice.
HSR Law can help you understand the rules and create an estate plan that reflects your wishes while complying with the law. Contact HSR Law today for expert advice on protecting your estate.
The best time to start planning for potential care costs is as early as possible, before any need for long-term care arises. Planning ahead gives you more options and allows you to make informed decisions about your estate, your family and your future.
Estate planning is about much more than protecting assets. It can include making a will, setting up trusts where appropriate and ensuring your affairs are structured in the most effective way for your circumstances.
HSR Law can provide clear, practical advice to help you plan with confidence. Contact HSR Law today to arrange a consultation with one of our experienced estate planning solicitors.