Care home fees dilema

OwenPerkins

I hope this is the right place to post this.
I live in a leasehold flat with my wife. We are both retired.
The flat is valued at £150,000 and we have £13,000 and 3 years left on the mortgage.
I'm considering an equity release lifetime mortgage.
My question is, when one of us dies and then the other one has to go into full time care, the flat will be sold and the lifetime mortgage paid off. Does that then mean that all remaining money from the sale will go to the council for the care so leaving nothing to leave to my children?
Thank you for any advice

OwenPerkins

Just thought of something else!!
If we take the lifetime mortgage and one of us has to go into full time care leaving the other living in the flat, what happens with the care fees then? My head hurts!

lisyloo

when one of us dies and then the other one has to go into full time care,

It's not a WHEN it's a IF (unless you know this is the case).

Most people don't need residential/nursing care.

Does that then mean that all remaining money from the sale will go to the council for the care so leaving nothing to leave to my children?

No.
https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/



Between £14,250 and £23,250 The local council will fund some of your care and you'll contribute to the rest. Less than £14,250 This will be ignored and won't be included in the means test – the local council will pay for your care. However, they will still take your eligible income into account.

lisyloo

If we take the lifetime mortgage and one of us has to go into full time care leaving the other living in the flat, what happens with the care fees then?

The property will be disregarded.
Assets of the person in care (usually 50% of the couple's total if joint) would be used (see rules above).
The pension and any income of the person in care would be used minus £25 per week which they are allowed to keep for personal items e.g. clothing.


Be aware that not paying means you are unlikely to get your first choice of home in your preferred location. Not paying is not necessarily a position to aspire to and I speak from experience (not saying you should do anything differently).

Linton

If the surviving spouse needs to go into care and owns a property then the council may not contribute anything to the care costs. So it is up to the surviving spouse or perhaps more likely their PoA to determine how to pay the costs. One option is to sell the house - the first chunk goes to repay the equity release, What is left goes to the surviving spouse who can use it to pay the care home costs.


If the money remaining falls below £23250 the council then pays some of the costs. If it falls below £14250 the council covers all the costs though in either case the council also takes all income above £23.90/week. Any money left when the surviving spouse dies goes to the beneficiaries.

lisyloo

Probably not that relevant but I think it's £24.90 per week.

lisyloo

Don't know how old you are but you should get LPA (lasting power of attorney) set up both for property/finance and health/welfare.


My MIL would not agree to this and has now lost capacity.
I've had to go through the court of protection for deputyship.
Applied in May and still waiting.


I am hoping this doesn't cause issue with her flat sale which is SSTC and I'm really hoping she doesn't die before I get to sell the flat and execute her husbands will (hope that doesn't sound uncompassionate just trying to highlight the issues that can arise).

Cheeky_Monkey

How much of the equity are you thinking of releasing and what do you plan to do with it?

kidmugsy

Does it matter whether the couple own the flat as tenants in common or as joint tenants?

lisyloo

Not sure whether that would be seen as deliberate deprivation, also have to make sure the remaining spouse is protected I.e. can’t be kicked out of their own home.