‘A common concern for our clients and their families is the prospect of having to sell the family home in order to meet care costs,’ explains Andrew McClure, a Senior Associate in the Wills and Probate Team with Nalders in St Austell. ‘There are many articles and schemes online which seem to indicate that selling a home can be avoided, but often these schemes are not legal and could land you in even more trouble.’
When might your local authority deem that selling your home is necessary
If you require care, either in your own home or in a care home setting, your local authority will assess your ability to fund your own care by considering all of your finances and your circumstances as a whole.
The home in which you live is considered as part of your overall financial situation if it is owned by you. There may be some instances, however, in which the value of your home is disregarded by your local authority when they are assessing your ability to pay for your care fees.
If you need to move into care permanently, it is likely that selling your home would be necessary in order to cover the costs of your care. However, you may enter into an agreement with your local authority that the costs are deferred until you choose to sell, rather than having to sell your home immediately. This might be beneficial if, for example, property prices are low and are likely to rise in the future. A solicitor can advise you as to the advantages and disadvantages of entering into such an agreement and help you decide whether it is right for you.
When selling your home might not be necessary
The rules surrounding when your home might be disregarded are complex and you should seek professional legal advice based on your specific circumstances. It may be that your home is disregarded on the basis of your personal circumstances and the care you require, where you live, who you live with, or how the property is owned.
Whilst not common, free care is available to some through NHS continuing healthcare or aftercare provisions under the Mental Health Act. Funding is only available in limited circumstances, and you would need to be formally assessed for either to be granted. You may take an independent legal representative with you to any personal assessment, and you may have a solicitor look over any documents or other paperwork that you receive in connection with the assessment. It is advisable to seek legal advice early on in the assessment process to ensure you have fair representation.
Your home is only included as an asset for the purpose of determining your ability to pay your own care fees if you own it. Therefore, if you rent your property or you have been permitted to live for free in a property owned by a member of your family, this will not be considered as part of your financial circumstances. In addition, if you own your home, this will not be considered if you continue to live in it and the care you receive is home-based.
If you live with your spouse or partner, a relative who is 60 or older, a child of yours who is under 18, or a relative who lacks mental capacity, the value of your home cannot be considered as part of your overall financial situation. If you jointly own your home with another person, your value of the shared home may still be taken into account, but this should be reduced to reflect the fact that another person has a financial interest. The rules around this are nuanced and, even if your home is disregarded this does not necessarily mean that it will continue to be disregarded forever. You should always seek legal advice based on your personal circumstances as those circumstances change.
Can you avoid selling your home altogether?
You cannot avoid selling your home by virtue of any illegal arrangement. Many people believe that they can simply give their home away to loved ones to avoid having to sell, but this will usually be deemed as a deliberate attempt to remove assets and the local authority would still calculate your ability to pay your own fees on the basis that the home continues to belong to you. This can result in even greater complications and unnecessary expense.
Careful estate planning with the guidance of a legal professional, however, can help you to structure your financial affairs in a way that is tax efficient, and which helps to ensure that your assets are as secure as possible to be able to pass on to your loved ones.
How can we help?
Selling property is often something people only consider at the point that this becomes necessary, however, planning in advance is essential to provide the most appropriate options for you and your family. Advice should be sought early to ensure that your affairs are structured in a suitable manner.
If you have left your legal planning late, before undergoing any care fees assessment, it is a good idea to speak to a solicitor to help you understand the law, your rights, and the likely outcome. During the assessment process, a solicitor can be a valuable support to attend meetings with, or to simply review any paperwork.
If you believe your home should be disregarded from your financial assessment, a solicitor will be able to advise you based on your circumstances and help you to ensure that the local authority have considered all relevant factors. If your circumstances change at any point, you should involve a solicitor again to ensure that you are not missing out or inadvertently flouting the law.
Our solicitors can help you to ensure that you have chosen the best option available to you and that you have made a fully informed decision.
For further information, please contact Andrew McClure in the Wills and Probate Team on 01726 879333 or email amm@nalders.co.uk. Nalders has offices in St Austell, Truro, Camborne, Helston, Falmouth, Newquay and Penzance.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.