Most couples make a Mirror Will leaving everything to their surviving partner and then to their children following the second death. It may come as a surprise to know that your children could end up with very little, or even nothing if one or both of you needs residential care.
Setting up your Will in the right way helps you to protect your property from being taken to pay for care home fees.
CARE HOME FEES – USING YOUR WILL TO PROTECT YOUR MONEY
Around 70,000 homes a year (190 every day) are taken by councils throughout the UK, to recover long term care costs.
The following is an example of how it works:
Mr and Mrs X have two daughters. They own a house (as Joint Tenants) worth £250,000. Mr X dies and Mrs X automatically becomes the sole owner of the property. Mrs X’s health suffers and she later goes into a care home costing £650 per week. Mrs X’s property had to be sold to pay for the fees. She lived in the care home for 7 years before she dies, having spent the entire value of the house. Mr and Mrs X had both died leaving no inheritance to their children.
What could have been done?
A trust could help save at least 50% of the property. If Mr and Mrs X had severed their Joint Tenancy to become ‘Tenants in Common’, they would each have owned a ﬁxed 50% share of the property. Then if they had taken out a Protective Property trust, when Mr X died his 50% share of the property would have been held on trust for his two daughters. Mrs X would have been entitled to stay in the property as a life tenant. She would have security and could even have moved house if she had wanted.
Then, when Mrs X went into a care home only her own 50% share of the property could have been used for the fees, because Mr X’s share would be held on trust for his daughters. When Mrs X’s died the children would have been £125,000 better off.
Protective Property Trust Wills must be written whilst you are both still alive and in good mental health. Unfortunately these types of Wills are unsuitable if you are single or a surviving spouse who now owns the property outright. It is therefore important for couples to act now.