Archive for March, 2011
Michael Overend, a specialist in wills and estate planning at law firm, Charles Lucas & Marshall looks at the steps which need to be taken when a partner requires residential care.
Q. My husband has Alzheimer’s disease and will shortly be moving into residential care. Will our house have to be sold to pay the care fees?
A. While you continue to live in the house, its value will not be taken into account in assessing how much your husband should personally pay for his care. You will not have to sell the house. A similar exclusion would be available if you were unmarried but living with a partner who had to go into care.
Q. My husband receives pension income and has some savings. Will these have to be used to pay for his care?
A. Your husband’s state pension and any other state benefits will have to be used for the cost of his care, regardless of whether or not he has any savings. Only one half of any occupational or personal pension will have to be used, provided the other half is paid to you.
To the extent that your husband’s income is insufficient to pay the care fees in full, then the shortfall will have to be paid from your husband’s savings if these exceed the prescribed limit (currently £23,250). Once the savings fall below this figure the local authority will start to make a contribution towards the fees.
Once your husband’s savings have fallen to the lower limit (currently £14,250) then he will not have to contribute any more of his savings to the cost of care.
If you have savings in joint names then you should separate these into individual accounts of equal value before your husband goes into care.
Q. Should I review my Will?
A. You should certainly review your Will if you are currently leaving your estate to your husband outright on your death. If your Will stays in this format your capital will have to be used to pay your husband’s care fees following your death.
You should consider changing your Will so that you leave your estate to a trust from which your husband can benefit. The value of your estate will not then be taken into account in assessing how much capital your husband has. Consequently the local authority will start to contribute to his care fees earlier than would otherwise be the case.
If the local authority’s contribution is not sufficient to pay for the care home fees in full then the trust fund can be used to make “third party top ups” to meet the balance of the fees.
When you update your Will, you should also take advice on the structure of your assets.
For example, if you own your house jointly with your husband then it is likely that on your death your share of the house will pass to him outright even though your will states that your estate is to be left in trust. You need to ensure that you own the house jointly as “tenants in common”. This means that when the first of you dies, his or her half of the house will pass according to the Will. For this arrangement to work satisfactorily, it is important that your husband has previously made a Will in your favour.
For further advice please contact Michael Overend on (01635) 521212 or email@example.com.