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How your Will can preserve half your assets
It’s a question we are often asked by worried couples. What if one of us dies and the other has to go into a care home?
When that happens, your assets – including your home – can be used by your local authority to pay the cost of that care.
There is a solution: make a Care Fee Will, which puts half of your property into a Trust when the first partner dies, rather than leaving it the survivor.
That keeps it safe for your beneficiaries because it will never become part of the surviving partner’s estate.
Benefits of a Care Fee Will
With a Care Fee Will, when one of you dies, the survivor owns half the property with the other 50% held by the Trust. There are other benefits of such an arrangement:
- The surviving partner can continue to live in the family home
- The Trustees controlling the other half will usually be family members, which means no external interference
- It is unlikely that you will have to draw up annual accounts for the Trust
- The surviving partner can sell the property freely and move or downsize.
Keep Control of Your Assets
If your partner dies, and you then need to go into a care home, the value of your property is included when the local authority assesses the savings available to pay for that care.
It’s not enough to decide that in those circumstances, you’ll simply transfer the ownership of your home to another person. If that happens within six months of you going into care, the council will still treat the asset as yours.
There’s also the risk that the person you pass the ownership to may run into financial difficulties. Plus, you might have to pay rent for living in someone else’s property – and they’d have to pay income tax on that rent.
Speak To an Expert
We talk to you about who you would like to benefit and in what amounts, including specific gifts and any charitable legacies, and then help you create the will itself.
How a Care Fee Will Works
Couples can draw up a Will whereby each of them puts their share of the property into a Trust when they die.
It’s important that you own your property as tenants-in-common, rather than jointly. Under joint ownership, the whole property passes automatically to the surviving partner.
When the first partner dies, their share of the property goes into Trust, so that only 50% of the value of the home can be used to pay care costs if the surviving partner goes into a home.
The survivor is usually one of the Trustees, along with other people chosen and trusted by both of you. If you have children, it’s likely one or more of them will become a Trustee.
