Avoid care home fees by divorcing!

[champchomp]

I know this sounds extreme but I’m thinking ahead. DH is a bit older than me and is having some health problems. We have no mortgage and he has a good pension and savings. I’ve seen instances where a spouse has entered a care home and the other one has struggled to pay the fees and had to sell up and use all the savings. Hypothetically speaking would divorcing and splitting assets protect some of the money and property. I know anything could happen between now and if my husband needs care but it worries me and we have children we would like to help financially if need be. I’d always be there for DH no matter what and visa versa. But financially does it make sense to financially separate/divorce if care is needed for either of us?

You have clearly never cared for someone with advanced dementia. It is a 24/7 job with absolutely no breaks. Sometimes they become physically violent putting their carers in danger. My Dad also started getting out of the house at night and wandering the streets. Nothing my DM did could stop him. It completely broke my poor DM before she finally allowed him to go into a dementia care home where he was happy as he was getting the full time care from a team of professionals that he needed. Believe me, one person trying to care for someone with advanced dementia at home is a very bad idea. You can’t provide all the care needed and you will ruin your own health.

Could you elaborate?

Herefordshire. A lone man was left in the bus station by his family because they couldn't cope anymore and couldn't get SS to help

Again, this is incorrect information, if a...

-spouse
-person under 18 or over 60
-disabled person

is in the same house, it is disregarded - this means it is not taken into account in any way, no charging order is placed - it is simply just not counted, when the person in care dies it forms their estate and passes according to their will.

If the situation changes during the time the person is in care, it can then be taken into account, for example someone moves out.

An aunt of dh (frail but no dementia) put herself in a very expensive care home for a month while her carer was away. It was exceedingly plush, decor wise, with sea views, the lot.

I visited her there twice. She hated it, and couldn’t wait to go home. The staff were unhelpful, surly and miserable, and the atmosphere was not remotely welcoming.
We placed FiL (her elder brother) in a considerably cheaper one close by - it absolutely couldn’t have been more different.

Actually it's the self-funders who are subsidising the state. Local authorities negotiate a much lower rate that self-funders. Councils pay £700-900 a week and self-funders pay £1200 - £1,600 for the same room.

Spend it and enjoy it .... give some to your kids now. The key is to have enough in savings to be able to choose a decent care home, but not tens of thousands, no point.

As an adult social worker, this is true.

I have seen many self-funders placed in the same care homes as LA clients. The self-funders may sometimes have 'nicer rooms', which may be a bit bigger with a view, but that's the only difference.

What usually happens is that the self-funder's money will be drained, then they will rely on the LA rate to pay for their accommodation.

It must sting, so spend your money when you can and give to your kids and grandkids :) don't wait until your 80s to try and give money away as the council will be on that.

you've told someone they don't need to something - you don't know what the situation is and it can in some circumstance be the very thing to do as it saves money on tax

just because you had money to give your offspring doesn't mean this person does and making changes might well change what people close to the op inherit

But at the same time, why should public money be used to pay for care for people who have hundreds of thousands (millions for some) sitting in the bank? FWIW I’m a higher rate tax payer, so is my husband and we have been for many years and we will face the same issue, so not a biased pov.

If you want to be sure of leaving money to your children, start giving it to them now, before care fees become an issue.

This is life. And society.

You either claim benefits and have everything funded for you or you don't, you have assets and savings that mean you don't qualify for the benefits if something goes wrong.

I remember MN at the start of COVID and all the people losing income who were really pissed off that they would have to use their savings to live because they didn't qualify for benefits.

They'd earmarked their savings not for looking after themselves if something went wrong but for a house deposit, new car, extension etc and didn't think they should have to use their savings to pay their bills and the state should step in.

I can see all points of view.

Why should anyone pay the crazy prices - ok why should the rest of us pay them instead do your children get a leg up?! It’s madness! I understand how frustrating it can seem to save for ‘nothing’ but that ‘nothing’ is actually decent compassionate care in your later years. Think of your saving like that, you are providing for yourself when you need it most.

Agree with others that lots of people don't seem to understand how the care system works, either in terms of liabilities (you won't be pushed out of your home, OP) or in terms of choice.

To use an analogy as regards choice, it's a bit like hotels. You get Travelodges and five star hotels. If the LA pays for your care, you'll get a room in a Travelodge. If you have the money to pay, you could still choose the Travelodge, or you could opt for the five star hotel, or something in between. Nothing wrong with a Travelodge of course, but let's not pretend it's the same as staying in a five star hotel.

So OP, if you love money more than your husband and you'd be happy to see him spend his last days in a Travelodge rather than a five star hotel, by all means try to cheat the system (though as others have said, you'll probably be caught). But he (and you) will be still be paying, albeit in a different way, through personal comfort and lack of choice. To my mind, as the saying goes, money is usually the easiest way to pay for things.

@Soontobe60

The following can be consider an advantage for some in certain circumstances.

Changing a home's ownership from joint tenancy to tenants in common allows each partner to leave their share directly to children via a will, rather than automatically to the survivor
. Key advantages include protecting assets for children, mitigating inheritance tax (IHT) using separate nil-rate bands, and protecting a share of the home from being used for the surviving partner's potential care home costs.
Key Advantages of Changing to Tenants in Common:

• Securing Inheritance for Children: With joint tenancy, the property automatically passes to the surviving owner, who could then change their will to exclude the original partner's children. Tenants in common ensures your share passes to your chosen beneficiaries.
• Inheritance Tax (IHT) Planning: If a share is left to children rather than a spouse, it can utilize the deceased’s individual nil-rate band, which is beneficial if the total estate exceeds thresholds, especially as the threshold is frozen until 2028.
• Protection Against Care Costs: If the first partner dies, their share (held in trust for the children) may be protected from being assessed as capital to fund the survivor's long-term care.
• Flexibility: While the survivor can still live in the house, the deceased's share is secured for the children, preventing the survivor from gifting the entire house to a new partner or spending the equity.

Important Considerations:

• Loss of Absolute Control: The surviving partner may lose the freedom to sell or remortgage the property without the children's consent, as they are now co-owners.
• Future Disputes: If children inherit a share while a step-parent is still living there, it can lead to disputes if children want to liquidate their inheritance.
• No Automatic Transfer: The survivor does not automatically own the whole house, which may cause insecurity if not managed with a properly drafted trust in the will.

Disclaimer: Property law and tax implications, especially regarding care costs and IHT, are complex and depend on individual circumstances. Seeking legal and financial advice is recommended.

Divorce probably won't solve the problem and if you remain in the same house a charge can be put against your DH's share, which could result in sale. Look into family trusts.

But the OP doesn't have to cheat anything, the system already protects her home for her, if she tries to buck it by divorcing then it will take up to 50% of the cash in the house.
If she stays married, they can't touch it.

To use an analogy as regards choice, it's a bit like hotels. You get Travelodges and five star hotels. If the LA pays for your care, you'll get a room in a Travelodge. If you have the money to pay, you could still choose the Travelodge, or you could opt for the five star hotel, or something in between. Nothing wrong with a Travelodge of course, but let's not pretend it's the same as staying in a five star hotel.

Don't forget that the Travelodge gives better deals to the local authority, so even as a private guest you'll pay more than if booked via the local council

There is no problem if they are married, the whole house is protected by the terms of the care act, they can't touch it.
If they get divorced then yes, a charge can be put on his 50% and she would have to sell up post his death.
Her best plan is to do nothing and read and understand the funding provisions of the care act - that protect her entirely.

It all kind of reminds me of elderly people moaning when the gvt stopped WTF credit apart from those on such low pensions and assets they could get benefits. A great many of these people moaning were though in fully paid off houses getting state and private pensions - if it’s that tight that £325 or so matters, draw a bit down on your house then - many ways these days of doing this without it consuming value of your house, just drawdown what you need that year etc - you only then pay interest on what you have drawn down - my 27 year old struggling with high private rent and no assets doesn’t get it and is paying a fair chunk of tax - why should these people feel entitled to it. OP you don’t sound like you like your H much and that you would rather have the cash - I may be wrong but if you are of that mindset - then yep divorce.

In my DM’s very good - but by no means the most expensive - care home, the council funded residents enjoyed exactly the same ensuite rooms and facilities as the self funders.

Have just redone our wills. Here is my understanding of one approach - note I am not a lawyer so check with your solicitor:

If your house is jointly owned, and if you own it as tenants in common rather than joint tenants (easy job for a solicitor to do), this results in each of you owning 50%. Don’t know if that is enough though, our solicitor didn’t mention it.

if you are wanting to make sure your children etc will inherit at least something and stop a local authority taking the entire value of your home, you can then both write your wills so that on the death of the first one, his/her half is put into a “life interest” trust for your children which means they will eventually inherit this half, but gives the surviving spouse rights to continue using both halves of the house, including selling it and buying somewhere else, or putting the entire sale proceeds in to an investment and getting some interest. This might be useful if you expect you would downsize, or would need extra income to e.g. replace your spouse’s income.

‘Why should anyone pay for anything’ is exactly the attitude you’re decrying from people you see as living off the state. And by the way plenty of people get to the end of their life with no savings having worked their behind off their whole life. The following generations absolutely should collectively pay for the care of lower paid workers who contributed all their lives. Including those lower paid workers who looked after people in nursing homes, because people didn’t want to pay too much money for it.

If you want to leave your savings and assets to your children, do it while there’s time to enjoy it together.

These threads give the absolute heave.

No no, only people who 'work hard' deserve to leave anything to their children. Working hard = assets, that's the Mumsnet measure.

This is absolutely correct.
No one puts a charge on the house, or forces a spouse to sell up to pay the fees.
Age UK have lots of info about carehome fees, and also a well informed forum where these sort of questions are asked.