Care Matters: Ashfords LLP look at giving your home to your children

Over 2016/17 we will explore the most common issues clients bring to us and explain the key points we cover when advising them.

In this month's edition, we will look at giving away your home.

At Ashfords LLP, we are frequently contacted by clients who are thinking about giving their home to their children.

This is often motivated by the fear that care costs will leave nothing to pass on to the next generation.

The clients may have heard that if they give away their house the council will be unable to take it to meet care costs.

That understanding is usually coupled with the expectation that the parents will continue to live in the house as if it were theirs.

Then, if the time comes to move into residential care, the property's value will be ignored because it belongs to the children.

My advice to people who come to me with this idea is simple, do not do it. Here's why:

• It's your home: You will not be able to move or do anything else with your home unless your children let you.

• It won't work: There are rules against disposing of assets to avoid paying for care. If the council think you have given away your home to avoid care fees they can act to undo the gift.

• You could lose it: If your children get divorced or become insolvent your home will be at risk to action by the "ex" or creditors.

• You might need it: You may want to raise money from your home to support retirement or to pay for a higher standard of care. Your children could refuse to let you do that.

Here are two alternative approaches we suggest to protecting your assets for the next generation:

Change Your Wills

If you own your home with someone else you can leave your share of the property to the co-owner for the rest of their life but state that when they die it should pass to your children.

If, once you die, the co-owner goes into residential care your share of their home will not be treated as an asset that can be used to meet care costs.

In addition, the council's means test states that your co-owner's share in the property must be valued at the price a 'willing third party' would pay. That will be less than the equivalent share of the property's open market value.

This means that half the home can be 'saved' for the next generation and the remaining half will be valued at less than would be realised if the property was sold.

Complete a Health & Welfare Lasting Power of Attorney

If you are cared for at home your property is ignored by the council when calculating your contribution to care costs.

Guidance to councils states that if you want to be cared for in your own home that wish should be supported - even if that requires a live-in carer.

If you do not move into residential care until your care needs are health related and are complex, intense or unpredictable, your care costs should be met by the NHS.

Support from the NHS is not means tested so your home is ignored.

So the value of your home is protected if you live there until you need the NHS's specialist support. That is, of course, what most people want.

If that is your wish you could complete a 'Health & Welfare' Lasting Power of Attorney stating that you want to stay in your own home until you need specialist medical support.

That strengthens your relatives' ability to secure care 'at home' rather than 'in a home' from the council - and so avoid your house being used to meet your care costs.

If you would like to discuss these ideas or other ways to plan for long term care please do get in touch.

Care News

• Petals Active Living Centre - Lavender Court, Taunton Last month we attended the launch of Somerset Care's service for people living with dementia.

The PAL Centre provides non-residential support and activities designed to promote independence and social interaction.

We know that this type of day care can be invaluable to those attending and to their families.

If you think this type of service might help you, you could ask the council to fund it as part of your own care, or your carer's, support plan.

• Funding In the elections for the Welsh Assembly funding for adult social care is a hot topic.

Plaid think that care should be free.

The Conservatives say that only people with more that £100,000 should be self-funding.

Labour argue the limit should be £50,000.

In the meantime the Association of Directors of Adult Social Services has announced a four year campaign to secure proper funding for care in England. While most Local Authorities (including Somerset) introduced a 2% increase in Council Tax earmarked for adult social care the general consensus is that this will barely cover the introduction of the new 'living wage' which came into effect this month.

• Pay to Stay Away Yeovil District Hospital will be trialling a new incentive scheme next year which will pay them to keep patients with long term conditions away from hospital.

The aim is to ensure that treatment is provided in a community setting.

The initiative is part of a series of 'Test and Learn' pilots that could be rolled out more widely if successful.

• Volunteering Somerset County Council have expanded the 'You Can Do' volunteering service.

The aim is to engage us in supporting care services in the County.

Everyone is encouraged to get involved and you can get in touch via their website http://somersetyoucando.weebly.com or by phone on 01278 664180.