Home Protection Plan (Protected Property Trust)
Are you concerned about losing your family home to care fees?
Anecdotal evidence suggests that anything between 40,000 and 70,000 family homes are sold each year to cover the owner's care fees.
Parents are also seeing nest eggs built up as intended inheritances for their children decimated over short periods once in care.
With advance planning this need not be the case. There are ways to protect the family home for the next generation.
Those who cannot afford to pay privately for care must look to the local authority for funding or assistance with funding. Virtually all income is assessable.
The local authority assesses both income and capital resources when they decide what funding or assistance with funding will be available.
- Above capital of £22,250 no contribution will be made by the local authority.
- Below £13,500 a full contribution will be made by the local authority.
- Between £22,250 and £13,500 there is a partial contribution made by the local authority.
The home is disregarded under certain circumstances:
- During the first 12 weeks of care.
- During temporary or respite care.
- If it is occupied by a husband, wife or unmarried partner.
- If it is occupied by a close relative over the age of 60 (or under the age of 16).
- If it is occupied by a relative under the age of 60 who is disabled.
The solution is to ensure that the home is not personally owned on entry into care. The local authority's financial assessment can then legitimately and properly be completed on the basis that the home is not a capital resource of the resident. The solution involves putting the home into a trust, so that the trustees are the owners.
The former owner has a guaranteed right of residence in the property for the remainder of his or her life. The trustees, usually the children, cannot evict the former owner in any circumstances. The trust is equally applicable to married couples as to single owners.
The Home Protection Plan offers the significant benefit that the home will no longer be subject to probate on death. The home can be sold or transferred by the trustees immediately after death with no probate formalities at all. This is potentially a significant advantage.
There are a number of factors to be taken into account when deciding if a Home Protection Plan is suitable. For further information please contact us