In the UK nearly a million people were living in nursing, residential or long term hospital care in 2005. The cost of caring for the growing army of pensioners is predicted to soar to nearly £30 billion by the year 2030. Women have a one-in-four chance of needing long term care, and men a one-in-six chance.
Whilst the government will pay those costs relating to nursing or medical care (the time spent by a nurse with the patient etc), the individual is liable for the costs of residential and personal care, often called social care, which is means-tested.
If you have assets up to £23,250 you have to pay a contribution to social care costs. If you have assets over £23,250, you have to pay all social care costs!
These costs are likely to amount to £20,000 - £50,000 per year or more. However, the family home will be disregarded as part of that person's assets if it is occupied by a partner or other qualifying person, which means that the local authority will not include the value of the house when assessing the person's ability to pay care fees.
If a person has to go into care, then under the Health and Social Services and Social Security Adjudications Act 1983, local authorities can charge residential care fees to (ie run up a bill against) that person's home. After that person's death, the local authority would normally expect the person's representatives to sell the property to pay the care costs. Furthermore, as a last resort a local authority can sell the deceased's property - if it obtains a court order - in order to meet the charge (or bill).
Your home could be under real threat if you have to go into care and your partner has already passed away. Liberal Democrat MP Paul Burstow estimated that 70,000 homes are sold each year (200 per day) to pay for care fees, meaning that the relatives of those people will not now be able to inherit the family home or the proceeds from the sale of the property.
In effect, if one of you dies and the surviving partner has to go into care, this can amount to a 100% tax on your estate above £23,250.
Therefore, to do nothing could be the equivalent of bequeathing your home to the local authority rather than to your family.
There could be a Solution
The Property Protection Trust Will is particularly suitable for married, unmarried and same sex couples (who own their home) in the following circumstances:
- Mature couples concerned about losing their home to pay for care fees
- Couples where one or both partners have children from previous relationships
- Couples who individually wish to ensure the inheritance of their children (or others) without forcing their partner to sell their home
- Couples where there is a significant age difference between partners
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