When Care Fees Put the Family Home at Risk
The family home is more than bricks and mortar. It is stability, memory, and security. Yet for a growing number of people later in life, that security can quietly come under threat not directly from debt, but from care fees.
Picture this scenario. A retired couple own their home together, mortgage free. One of them develops serious health issues and needs long-term residential care. The pension income cannot cover the monthly cost, and savings are limited. Luckily, the local authority agrees to fund the care, but places a Deferred Payment Agreement (DPA) against the property so the costs can be recovered later. The other partner continues living at home. Life carries on until a little time later, the partner in care passes away.
At this point, the local authority may now look to recover the outstanding care fees. Because the property is owned jointly, that can mean forcing a sale of the entire home. The surviving partner can find themselves under pressure to sell, at the very moment they are grieving. However with suitable estate planning, this outcome is not inevitable.
After ensuring on the title that each owner’s share is clearly defined, they can each protect their portion using a Property Protection Trust (PPT) written into their wills. When the person in care dies, their share passes into a trust rather than outright. The DPA remains attached only to that share.
This significantly strengthens the surviving partner’s position. The property does not automatically have to be sold, and any recovery action is limited to the deceased’s share rather than the whole home. In practice, this makes a forced sale far less likely, while preserving the remaining equity for the family.
To find out how structured estate planning can protect your family’s wellbeing and assets, please contact Hirschle Hughes Estate Planning for a free initial consultation
Contact our Adviser Jonathan Treliving to find out more
