How to protect your assets via your will

A will is an essential estate planning tool which outlines who you would like to inherit your estate when you die. The value of your estate and your family dynamics are individual to you, so it is important that you seek professional legal advice about your circumstances. Different types of wills are needed for different people.

Without the correct advice, the value of your assets could be spent unnecessarily on care home fees.

Understanding how care home fees are paid

Currently, if you go into care, you either have to self-fund it, the council will pay for it, or you could be eligible under the NHS Continuing Healthcare criteria.

If you are not eligible under the NHS Continuing Healthcare criteria, your council will carry out a financial assessment to determine whether you have to pay for your own care or if the council will fund it. They may take the value of your home into account as part of the financial assessment.

If your capital is over £23,250, then you will have to pay for your own care. This means that most people will have to pay for their own care if it is required. The value of your home will not be counted in the financial assessment if any of the following people still live in your home:

• Your partner, spouse, or civil partner
• Your estranged or divorced partner, if they are a lone parent
• A relative who is under the age of 60 with a disability
• A relative over the age of 60
• A child of yours under the age of 18

The average cost of a care home will be determined by the area that you live in and what your needs are. Care homes that provide specialist care, such as dementia care, are usually higher.

The Importance of Life Interest Trust Property Wills

With the correct planning, it may be possible for a couple to ringfence part of the value of your home so that it cannot be used on care home fees and passed down to your loved ones instead. This is known as Life Interest Trust Property.

Basic wills 

Without these types of wills, your assets could have to go to care home fees, like in the below example:

Mr and Mrs Jones are in their 80s and have three adult children. Their joint estate is worth £350,000 made up of £50,000 in savings and £300,000 in a property. They had basic mirrored wills, leaving their entire estate to each other in the first instance, and after both have died, their estate passes to their three children equally.

When Mrs Jones dies, and in accordance with her will, all of her estate passes to Mr Jones. However, Mr Jones’ health deteriorates, and so he has to go into a care home for six years. The council undertakes a financial assessment when he goes into care, and as his assets are over the £23,250 threshold, he has to pay for his own care. 

His care fees are £40,000 per year, so this amounts to £240,000 over the six years. As a result, the family has to sell the property to pay for care. When Mr Jones died, £110,000 is left to be passed to his children in equal shares.

Secure your family’s future

It is important to seek professional advice when putting in place a will, as we can also advise you on any Inheritance Tax implications. Our team of will specialists are here to advise you on the different types of wills available, to ensure that as much of your wealth can be passed to your loved ones as possible.