Can I Use a Will to Protect my Estate from Care Home Fees?

Can I Use a Will to Protect my Estate from Care Home Fees?

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IHT and Care Home Fees

The thought of moving into a care home can be daunting. Not only will you have to leave a familiar setting but you’ll also have to juggle a range of financial intricacies. Care home fees are notoriously expensive. But with some careful financial planning, you can potentially save a large chunk of your estate. Professionals such as Kent tax advisors can point you in the right direction, so don’t hesitate to seek help from those who know what they’re doing.

Care Home Financing

Care home financing can be difficult to understand but let’s start with the basics. You will not be entitled to help with the cost of care from your local council if:

  • You have savings worth more than £23,250 – this is called the upper capital limited (UCL). This will rise to £100,000 from October 2025, so there is a glimmer of hope here.
  • You own your own property (this applies if you’re moving into a care home).

It’s important to ask your council for a financial assessment to check if you qualify for any help with costs as everyone is different with varying needs and a unique financial setup.

Protecting Your Assets

Building up assets and a decent net worth isn’t easy. To see it all go on care home fees ‘because you can afford it’ is therefore gut wrenching. Paying for care fees could dramatically reduce the amount of inheritance you wish to pass on too. But is there a way around this? Well, it is possible for a couple to ring fence a part of their estate. This requires careful planning, however, so never go it alone and always seek professional help. Expert estate planners such as Nick Hughes will be able to offer sensible advice.

The best way to protect your wealth from care home fees is to set up a trust fund for your spouse. This will allow your spouse to benefit from your estate without actually owning any further assets. This means that if the surviving spouse is means tested, the assets held in a trust won’t be counted as part of their estate and therefore they will only have to pay care home fees until they reach the £23,250 threshold.

If you and your spouse own property as tenants in common (rather than a joint tenancy), you can use trust wills to ring fence your 50 percent share. For example, if Mr. Smith ring fences £120,000, reducing Mrs. Smith’s estate total to £120,000, she will only have to pay care home fees until she has £23,250 remaining. At this point she’ll receive government help. The trust fund sum of £120,000 would go untouched.

Protecting your estate is of paramount importance, so make sure you seek out professional advice if it looks like you or your spouse will need to move into a care home facility.

Tax