How to mitigate potential care home fees

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Hey everyone

I’ve been catching up on old and new threads as well as the www regarding estate planning, and I’d value the community’s perspective.

When you’ve spent 40 or 50 years working long hours, holding down two jobs, and living responsibly, you want to ensure your hard-earned money benefits your kids and grandkids.

Yet, for ordinary, down-to-earth families (homeowners, maybe a buy-to-let or modest savings), protecting assets feels like a balancing act:

1. Trusts feel like they're designed for the seriously wealthy.
2. Giving away large amounts early is risky. You can’t predict health changes, divorce, or hardship, and you must retain enough capital for maintenance, council tax, and inflation.

In real life, buying a home and paying off a mortgage involves huge personal risk—working 70-hour weeks and risking your own hard-earned deposit and payments if life goes wrong. That’s why so many of us choose not to blow our money or take unnecessary financial risks.

We aren't looking for dodgy schemes; we just want a fair, legal way to pass on what we’ve built to family or good causes, rather than seeing it wiped out by care home fees or unnecessary IHT.

It just seems 100% unfair (unlimiteed carefees and 40% IHT) that those who have been prudent throughout their lives and did what many perceive as doing the "right thing" by working and looking after ones slef and family they are hit in the mouth via possible IHT and care home fees whilst many don't and possibly have not worked the 40 to 70 hours a week even when they could and lived beyond their means.

To those in a similar situation, what legitimate, effective steps have you taken to protect your estate?

FYI - If IHT is due then fair enough, but at 40%, it's not, as we have already paid taxes several times and still paying and no cap of care fees is NOT fair for those who have to pay them, and this is not a political debate but a fact of life I'm also aware of the current allwances and the care home fees have NO cap, hence how to mitigate losing your money via that route

RAS

Political debate is not allowed on MSE, but let's clarify one fact.

If you are married or widowed, have owned a house and leave your estate to direct descendants, IHT kicks in somewhere between £650k and £1m, depending on the value of the house.

And for care fees, the house is disregarded if a child under 18, family member over 60 or partner is resident. And sometime a person with disabilities.

tacpot12

You are thinking about this all wrong. Your savings are what you have saved to pay for your long-term care in old age. Who else do you think is going to do it? You haven't paid National Insurance to cover this as this was never a cost that NI was designed to cover.

Paying for it yourself means you have choice. The poor people who couldn't buy a house and still have to rent, or have their rent paid for them by housing benefit, will have no choice. They will have to put up with the absolute minimum that the state can afford to pay for, in the least comfortable care homes.

It is not 100% unfair, but neither is it 100% fair. A fair system would be the sort of national insurance that currently provides for health and pensions as this spreads the cost over the whole nation, but we have to contribute to this to make it happen FIRST.

In the meantime, plan to use your savings to look after yourself and your partner/wife. Anything that you don't need can be passed onto your children, albeit with some IHT to pay; but even with IHT, most of what is left will go to your children. Only a bit goes to help other people, and you should feel good about paying tax. Paying tax is not a bad thing IF you can afford it, and when you are dead, you most certainly can!

Albermarle

It is legitimate to post questions about mitigating future costs, but it is best to avoid politicising your post, such as saying,

FYI - If IHT is due then fairl enough but at 40%, it's not, as we have already paid taxes several times and still paying and no cap of care fees is NOT fair for those who have to pay them.

As this ensures that probably half the answers you get will be responding to your opinions rather than trying to answer your questions. For example someone will probably say, why do you think other council taxpayers should pay for your care fees?

1. Trusts feel like they're designed for the seriously wealthy. Maybe, but the main problem is that they are expensive to run, bring significant admin and usually fail to protect your money anyway
2. IHT - The three simplest ways to reduce IHT liability, is to spend more when you are alive, or give it away to family and friends and live for 7 years, or give it to charity.
3. Care Costs, Similar advice really, although the rules are less fixed and the local authority will have their own views and what constitutes Deprivation of Assets. Also you need to consider whether you ( or spouse) prefer to potentially spend your final years in a downmarket care home, just so your family can inherit more money. Have you asked them what they prefer to happen? Worth noting as well as that most people do not end up in a care home, although more need some ( usually cheaper ) care at home.

Pollycat

OK.

I'll say it:

why do you think other council taxpayers should pay for your care fees?

poseidon1

Looking at some of your past posts I can see you do have recurring concerns about the impact of IHT on your estate, and potential erosion of assets in the event one or other of you need to go into care.

I was going to suggest that since the value of your estate is evidently very much IHT exposed you would very likely benefit from bespoke targeted professional advice, rather than trying to cobble together a strategy based on other people's experiences who don't share your exact circumstances.

However, the response you gave ( below ) in an earlier thread to the question why you don't seek professional paid for advice, suggests you will be constantly revisiting this forum on the same issues, but not really arriving at a strategy that will work for you. Randomly searching the Internet for answers to complex tax and estate planning issues, is probably not the best approach to arrive at an optimum plan of action.

'' Look at it like this. I trust "posters on a forum" who in my observations/judgment, have a good history of easy-to-understand comments that are relevant to the question/s I have asked or someone else has. Along with that I always do my own research and often looked around the net before posting. Then I follow through some advice/recommendations and a good example is with help on this forum, I was able to find a link to TC from a dot-gov site.

With posters, they won't cost me money but often I pick bits from posters and build on it and if someone is giving what others feel is dud advice/etc, others will say so.

Therefore, all in all, I do trust "posters" more than professionals on the whole and armed with this knowledge, I am in a more commanding position to hopefully filter out money-grabbing, selfish professionals, hopefully.

The only people I've trusted 100% was my mum, closely followed by some of our children then my wife - other than that, and especially traders/professionals/etc/etc, I only trust them as far as I can throw them, and at my age I can't really do that.

A day may come when I can't even "trust" myself, hopefully it that day never materialises.

I've noted your comments many times on many threads and for it is worth, on the forums you are a good and helpful poster.''

kimwp

https://forums.moneysavingexpert.com/discussion/comment/82167421#Comment_82167421

Well put. The money doesn't appear from nowhere. If someone pays lots of tax, its because they have lots to tax. (Though vice versa is not necessarily true!)

sheramber

https://forums.moneysavingexpert.com/discussion/6686602/how-to-mitigate-potential-care-home-fees

Remain at home with family caring.

After all they are going to get the inheritance.

Pollycat

https://forums.moneysavingexpert.com/discussion/comment/82167437#Comment_82167437

Actually, I pinched it from Albermarle's post...but maybe the OP could answer it.

Me and OH have worked hard too but we're not looking for someone else to fund care homes for us if we get to the stage of needing care.

lincroft1710

When you’ve spent 40 or 50 years working long hours, holding down two jobs, and living responsibly, you want to ensure your hard-earned money benefits your kids and grandkids.

NO, you want to ensure YOU reap the benefits

DiamondLil

If I were to sell my home and spend the money on a nicer place to live, no-one would bat an eyelid.

But spend it on a more comfortable life in a care home ? No way Hosé ! All the other taxpayers must pay,