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?

I think that's just because a lot of people don't understand or believe that fact!

This.
Severed tenancy protects the property.
Putting property into Trust does too.

If you get strategically divorced and your husband loses his marbles, there is no stopping your husband marrying the young Russian cleaning lady and giving lots of his money to her son…. (As happened to my uncle!)

she just really loved him when everyone abandoned him even his wife. He is a bit confused but happy. She is now his full time carer, and has access to all the funds

touching story really 😮

It’s not necessarily miss-information, though is it?

If you split owner ship 50/50 in a tenants in common arrangement and leave your share to children/other dependents and NOT the spouse, then the surviving spouse cannot be forced to sell the property once they are are sole occupants and go into LA care - which would happen if they take full ownership under joint tenancies/marital asset rules. Yes, the LA can put a charge on the 50% owned by that second surviving spouse to reclaim fees upon their death, but their claim is capped at 50% of the value of the house. However, there are IHT issues if the [share of] the asset being passed on is worth more than £325k (ish, I can’t remember the current sum) because that may require it to be sold to settle the tax debt instead.

If the child/person you leave the other share to also lives in the house and is in anyway disabled (autistic/claiming PIP), then, the LA cannot even then sell the property on the passing of the second spouse and the home is protected for descendent dependents. I think there are other nuances that friends have explained to me, which a thread like this cannot cover.

@champchomp speak to a legal advisor before doing anything and discuss the possible needs of both parents and any descendants.

You are very naive if you think that you will get the same level of care as people who are fully funded by the Council.

Not all, but the majority do.

And the cost of inheritance tax is a certainty, not a possibility like care home fees. Dumb move

Most of us work hard and pay taxes. We just didn't happen to be in jobs that paid a huge amount.
What do you think the people that will be caring for your husband are doing? Do you think they can afford to do this?
Is what your husband did fo work so very important to society that you get to scam the rules?

But if your asset is not of a value that attracts IHT, then it’s not a dumb move is it? Not everyone lives in a house worth half a million. And for their descendents, the £100-150k that might be preserved for them with clever - wise - financial planning, could be life changing.

Put your house and assets in a trust for your children, that way it can't be touched.

Th big difference between self-funding and depending on the state to provide care is that you get choice.

My DM is self-funding. We were able to choose a care home which was purpose built, pleasant, easy to get to and most importantly provided 'through care'. This has meant that as her condition has declined she hasnt had to move, the level of care has increased. Cost is around £1500 per week.

If we had depended on the state the care home could have been anywhere in our very large county. It would also have no doubt been the cheapest, possibly one of the 'requires improvement' care homes. These can be deeply unpleasant places.

DH and I are sorting our estate to mean that there are funds available to provide care for each of us. If there is anything left then the DCs will inherit.

There’s not really any need to split savings into two equal savings accounts as the money in a joint account will be deemed to be owned 50:50 by each person named on the account and only the share of the person receiving care can be taken into the LA calculation of assets to go towards care. So no point disrupting existing joint account arrangements as it gives no benefit. The exception to this is ISAs and pensions which can only be held in single names. Make sure funds in these are spread evenly to both partners.

💯

As someone who has been through this.

Understand that around 100,000 people have done this in the last few years - it was featured in a recent Telegraph article, soo I give it until the next budget before Reeves tinkers with trust rules to undermine this. I say that as someone exploring a trust for my kids too (both autistic/SEN, one sufficiently ‘disabled’ that we are not sure they will work FT/be fully financially independent, so the trust would be our way of ensure they are not a burden on the state or other family members, before the vipers pounce).

You are correct about the joint accounts treatment.

Agreed, this is exactly what happens.

Well it wouldn’t work. If you divorce half the house is his and they will take it to pay for his care. If you’re married then the house is disregarded and it’s only his share of joint savings that is “taken”. Of course you could save all of it by caring for him yourself instead of divorcing him when he gets too old or sick. Nice wedding vows those.

So you want to make the spouse homeless, how is that fair or even sensible?

Aside from the chat about house, if you divorce you won't get any spouse pension from private pension once dh passes.

Not sure it’s as cut and dried as that, but agree that a divorce where you continue to live with each other will be regarded with suspicion by the LA. I think there is a ‘deliberate deprivation of assets’ thing that means that if you have set up finances to deliberately remove assets from an elderly person in order to avoid impending/future care fees, the LA can go after it anyway.

Divorce is not the route I would go through.

Kind of a separate issue but I don’t understand why older people hold on to so much of their savings if their mortgage is paid off, they can live on their pension and they want their dc to inherit

Give them some now, presuming they are sensible adults & will use it wisely - and you have the pleasure of seeing them enjoy it

But keep plenty to pay for care if needed too - it is your responsibility, that’s just how it works in the country you choose to live in. Or open a care fees plan now

What ages are you?

All these societies where the “family” cares for elderly people, the care burden falls almost exclusively on women. It is assumed women do not need to work.

In our society many families cannot survive without both husband and wife working. Single mothers (yes it is almost always the mother who does the lion’s share of childcare when relationships break down) are under a lot of pressure from society and the state to work full time.

So with women having no free time due to being required to work there is no one with the free time to offer this care anymore.

More a case of can’t rather than won’t.

Why do you think it costs that much?

Itsmetheflamingo….. would you care to enlarge on your comment please?

She might want to see how much assets and savings care staff tend to have on their fabulous salaries...

I wonder if OP realises that a lot of the "cost of care" is actually the cost of accommodation, building maintenance, food etc... basically the living costs you'd have anyway. The actual care fees are separate. Some places do let you buy or part buy your flat/en suite room and will buy it back at a guaranteed rate when required.

It is a tough one. We all want our inheritance, we all want to leave inheritance and yet care costs exist and they need to be covered somehow... and the state can't do it all for an ageing population. If we have the means, we really do need to make some contribution.

A lot of people are saying things like this.

I think it’s naive. I know two people in care homes. Their families would like to care for them but are unable. The first lady is PEG fed now and requires 24 hr nursing care. Her spouse is frail and has mobility issues and their son wouldn’t be able to provide medical or intimate care for his mum.

The second person has dementia and gets upset and violent at times. Also has several other medical issues which means he’s at risk of falls and more. His partner is both elderly and petite. Their child, who has SN children herself, is unable to step in due to work and caring duties.

Neither of these families envisaged care homes in their future.
I know others who’re making it work at home, but it really isn’t always possible. It’s hard to predict what the future holds.