Care Fees

The Law on Care Fees

The Local Authority has to provide care for all individuals who have a need. They receive money from the government to meet these needs, whether they are at home or in a nursing or residential care home. However if you have over £23,500* in assets you have to pay for your own care fees in full, and this includes the family home.

When your assets have reduced to £23,250* the Local Authority will then partially contribute towards the cost of your care, until you have just £14,250* remaining.

Personal savings, investments and an estimated 70,000 homes a year are sold to pay for care fees - adding up to £billions.

Case Study 1
Case Study 2
Case Study 3

Mrs A had to go into care – all her money was lost to pay for the care provided.

The family then hoped the council would pay her care costs when her money ran out, but the council refused to pay and the house had to be sold. Mrs A was left with just £14,250 in assets.

Had Mrs A taken our advice we would have conducted a thorough review of her situation in advance of her ailing condition, To reduce probate fees we would have recommended our English Family Trust and could have placed her cash, assets and house into the Trust for the benefit of herself and her children.

This also would have saved the family £000's in probate expenses, and in addition ensured a swift transition of her assets upon Mrs A's death.

Had she gone into care, the house and cash would have been protected.

Mr and Mrs B were in their nineties when they set up their English Family Trust.

They transferred their property in June 2006 and went into care in February 2008. The Local authority met their care costs and did not attempt to recover the care costs from the property.

The house was saved, and they will now save probate fees.

Mrs C owned a house with a small mortgage.

Her son and daughter were concerned about her care costs and probate costs. We set up a family trust but in this case the children wanted to clear the mortgage, the son and daughter put up the funds and the Trustees gave them security over the property. 

Mrs C later went into care in Scotland which is exempt from care fees but later moved to a care home in England to be closer to her family. The Trust worked and the house was protected. The Trustees then decided to sell the property and pay back to the son and daughter the mortgage money and the balance was retained by the Trustees for the welfare of Mrs C.

Lessons to be learnt

  • It pays to get the right advice.
    It can cost dearly if you don't.
  • Having a Trust does not restrict the care you receive.
  • The Trust is for the benefit of the parent until they die,
    and then for the benefit of the children and/or other relatives.
  • If you place your assets into a English Family Trust at the correct it will work.
  • Avoiding the Probate procedure cost is a big advantage of the English Family Trust.

For the homeowner's protection and peace of mind

The former owner of the home has a guaranteed right of occupation. The trustees, usually the children/trusted family member, cannot evict the former owner.

If desired, the trustees can sell the property and buy a new property, of the former owner's choice.

If the property is sold, usually when the former owner is going into care, the proceeds of sale can be invested and the former owner will receive the income.