Nursing Home Fee Planning
Millions of elderly and some not-so-elderly homeowners fear the financial impact of moving into a nursing home. The cost, ranging from £500 to £1000 per week, can quickly deplete the value of a family home, leaving nothing for the next generation. However, you have options to protect your home and secure your legacy.
Your Options
Option 1: Do Nothing
- Low Probability: Only around 6% of people actually move into a nursing home.
- Pros: No immediate action or cost.
- Cons: If you do need a nursing home, the fees can quickly consume your home’s value.
Option 2: Change Ownership Structure
- Joint Tenants to Tenants in Common: Altering the ownership to tenants in common allows each spouse to will their share separately.
- Life Interest Trust: The surviving spouse can live rent-free, and only their half of the property is assessed for fees if they move into a nursing home.
- Pros: Lower cost, maintains flexibility while both spouses are alive.
- Cons: Only protects half of the property, and the arrangement cannot be changed after the first spouse dies.
Option 3: Full Life Interest Trust
- Transfer to a Trust: Place the home in a trust, allowing you to live rent-free for life.
- Protection: If you move into a nursing home, the capital value of the home is protected as it is not considered your asset.
- Pros: Comprehensive protection of the home’s full value.
- Cons: Higher cost, difficulty in altering the trust after establishment, potential limitations if you move to rented accommodation or sheltered housing.
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