These can be a useful way to avoid assets being absorbed in residential or nursing home fees.
For those not eligible for full National Health Continuing Care funding the risk of the bulk of their assets being absorbed in care fees is a serious worry, but for couples there are legitimate ways of ring fencing the assets of one spouse against means-testing.
Currently anyone with over £23,250 capital will have to meet all their care fees in full. So, if one spouse has died leaving the whole of their estate, including their interest in the family home, to the other then should the surviving spouse move into residential care the whole value of their joint assets over and above the £23,250 will potentially be assessable for funding.
If you plan ahead you can quite simply arrange your affairs in such a way that the deceased spouse’s interest in the family home is not included in the value of assets for means testing. First you will need to ensure that you own your home together is as ‘tenants in common’ and not ‘beneficial joint tenants’ – and then you will need to have your Wills prepared to include a Protective Property Trust, under the terms of which the first spouse to die will leave his or her interest in the property in trust for the beneficiaries who will inherit the joint assets of the couple on the death of the second spouse to die, but subject to a proviso that they will not receive it until the surviving spouse dies. This means that, whilst the the surviving spouse will not own the deceased spouse’s interest in the house its value cannot therefore be taken into account in any means test for financial assistance.
The same arrangement is also useful in ring-fencing the assets of the first spouse to die should the surviving spouse remarry. The existence of the trust will ensure that the beneficiaries whom the deceased spouse wanted to benefit (usually the children) will ultimately inherit their interest in the home, rather than the surviving spouse’s new partner.