Planning re care costs- joint or separate accounts

[Scrunchcake]

Hello, my in-laws have asked me to find out whether they should consider having separate bank accounts rather than their existing joint one, to be in a better position in future in case of needing to go into residential care (not imminent but probably not years away either). Can anyone suggest where I could get some reliable info on this please? I've tried googling but not sure where to get trustworthy guidance. Thanks in advance for any help!

Yes separate accounts. Care homes billing can be erratic so better to have any care costs coming out of one account and not leaving the other person with a cash flow issue.

Yes, they should definitely seperate their finances. Just to give you an example, say they had a joint account containing £50000. Each person owns £25000. One of them incurs care costs of £2000 a month. After month one there is £48000 in the account so each of them own £24000 and so on. We learnt this when my dad became bedbound and had a care plan. Also, once you have separated their accounts, have household expenses taken from the person receiving care. As the contents of their account diminish with these and the costs for care, the care costs will reduce over time.

Are they both likely to end up in residential care? Or one stay in the house?

It makes sense from a care costs perspective but be careful which account any household bills come out of. On a death the bank account is frozen but the bills still need to be paid. If it's joint the survivor can still access and use that money. I have seen a situation where the man paid all the bills out of individual account. He died, account frozen, widow left struggling to pay bills as her individual account only had her very small pension going in.

There was a post on here a couple of years back, numbers aren’t right, but the principle is there. Couple had joint account, £80k, one went into residential care as self funder as her share was assessed at £40k. After a few months, she’d paid £17000 in care home fees and was down to the £23k where LA contribution to funding kicks in. In the same time husband had spent £4000 and was down to £36k.

So joint account now had a total of £59k, £23k hers, £36k his. But LA looked at it and said £29,500 each - you’re still a self funder.

Shouldn’t work like that, but it makes things clearer if savings are clearly separated.

The only thing I’d be cautious of is splitting funds immediately before care is needed. LA will be on the look-out for evidence of deprivation of assets.

@EmotionalBlackmail no way to predict at the moment tbh.

Thanks for all of the food for thought everyone

The other thing they might want to do is change to being tenants in common rather than joint tenants, if they own a property. This means that each parent can individually leave their half directly to their children should they die, rather than it automatically going to the surviving spouse.