Planning for Later Life: A Delicate Balance

There are many issues to consider in later life planning but having the right documents in place definitely helps.   With an increase in diagnosed dementia it is important that early consideration is given to planning as mental capacity is required for legal documents to be valid.  Protecting your home and your loved ones needs careful thought.

Can’t I just give my home to my children now?

There are two issues here, one is inheritance tax and one is care fees. From an inheritance tax point of view you can gift your house to your children but you would have to live 7 years before this would mean no inheritance tax was due on the gift if you die. However, this just isn’t viable for most people as you cannot retain a benefit from the property, meaning you cannot continue to live in it after you have given it away, unless you pay a full market rent.

From the point of view of care fees, the Local Authority will invariably see this as intentional deprivation of assets and will assess you as if you still own the property.

Then how can I protect against care fees?

In short, you can’t completely. However, you can certainly improve the situation.

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