Inheritance Vs Care Fees

[G7ivp]

This is a question about legally protecting an asset from seizure by a Local Council to pay for care fees.

A and B are married, own their only house (which they live in), it is in England and they hold the property as Tenants in Common 50-50. They have three children they wish to inherit the house and their wills each leave their half of the house to the children in equal shares. Now, if they both die together no worries the children get the house between them.

If the husband dies first his share goes to the children and, hopefully, they will allow their mother to live out her days there but the risk of one, or all, forcing a sale is acknowledged. If the mother, who has a degenerative condition, dies first then the same situation will prevail for the father.

However, if the mother needs to go into care at some time in the future then the Local Council will look to her to fund some (all?) of this and, as the couple have no savings, is it likely that it will put a charge on her half of the property to cover these fees (or contribution thereto)? If that is the case is there anything that can be done to prevent this so that the children eventually inherit her half too?

[Peridot]

Hi G71VP,

All too common issue these days I'm afraid. I would hope that when the wills were prepared a right to reside in the other half's share of the property was included. We hope beneficiaries wouldn't turf out the other owner but it has been known so best to protect each other when leaving your share to someone other than your spouse or partner with whom you live. Don't panic if that has not been done, generally things go to plan with the family, I suppose too often in practice we see the ones that go wrong which does get us twitchy.

As far as the care fees are concerned, I'm afraid there is no way to get away from the fact that as many more of us in the future may require care in our later years, there has to be some way of funding this. If individuals have assets then these will be used. Potentially if either parent had to go into care then their 'share' of the property will be used in any calculation of care fee assistance and potentially a charge applied, unless there is another way of funding the care.

It is still only a small proportion of the population that need to go into homes in later years and an average stay is around 15 months. However, with degenerative diseases such as Alzheimer's this may not be the case. Care can of course be received in the home but the cost works out similar to those of a care home, which again could be applied by way of a charge against the property.

The care could be funded by the children or if a charge were applied they could 'pay it' off themselves thus retaining the house but of course this would depend on their financial circumstances.

You may have heard of people transferring their property to their children sooner. Personally I would not suggest this to anyone. The home is often their only security and if someone else owns it they can become homeless or if the legal owner were to divorce or became bankrupt for example the property value would be included in any calculations needed in their matter irrespective of who lived there. This action also opens up the potential for allegations of intentional deprivation which on the basis of your scenario is what it would be - trying to protect the property for the next generation rather than paying for the care the individual required. Not all Local Authorities are as rabid about pursuing these claims but they are becoming more likely to look into it and any transfer could potentially be reversed.

Hopefully care homes won't be necessary for either of the parents but if they are then it will be necessary for those care fees to be funded from their assets, which includes the house. Whilst one of the couple still lives in the property an order for sale can't be made, although a charge can still be placed over the respective share of the property.

Probably not what you wanted to hear I'm afraid.

[G7ivp]

As ever a full, detailed and easy to understand reply from you Peridot.