“However, if people take action while they can, there is a perfectly legal will that can be written which can protect their home from long term care (LTC) costs,” explained Marcos Kallou, head of Heritage Will Writers, the Epping-based specialists.
“This is an increasingly important issue which is affecting growing numbers of people, as the UK’s population ages,” commented Kallou. “After covering this story in May this year, the Panorama programme makers were deluged by emails and messages so that, for the first time ever, they ran a follow-up programme within a few short months.”
The Panorama programme revealed that, in many cases, the sale of these properties is illegal.
Some years ago, a test case – the Coughlan case – changed the law so that the NHS became responsible for paying the nursing care element of LTC and the individual is only responsible for the social cost element.
“Clearly then, where someone has serious health issues and needs constant medical attention in care then, by law, the NHS should foot virtually all the bill,” said Kallou. “Yet this does not happen.”
After a challenge in the High Court recently - where the NHS lost - the Government sent out new guidelines which were meant to rectify the situation.
“These guidelines are being ignored and the same old ways are continuing,”
“Invariably, this means selling their home.”
Kallou’s company offers a way of avoiding this.
“Essentially,”
“On the first death, that person’s half does not pass to the surviving spouse but to the children - or whoever - via a Trust.
“If the second person then goes into care, they only own half a house for the purposes of the means test - and so the means test is adjusted accordingly, thereby guaranteeing to protect the half of the home that is in Trust.
“Moreover, when the means test is conducted, the Local Authority must consider the open market value for that half house and not the ‘bricks and mortar’ value,” Kallou pointed out. “The guidelines state that half a house has no value on the open market and therefore, the Local Authority should ignore the value of the home completely - since one half is in Trust and does not belong to the person needing care, and the other half is deemed to have no value.”
Kallou – and his growing list of clients – believe that putting together this type of Will, called either a Protective Property Trust Will or a Life Interest Will, can protect people’s homes from the demands of meeting LTC costs.
“However, both partners need to be alive for this approach to work,” Kallou added.
End
