How to Stop Your House Being Used to Pay Nursing Home Fees After The Death of a First Spouse

Quite an emotive subject. We all know of someone who has lost their home to pay for Nursing Home Fees. All too often this means that the family home, which was meant to be the legacy to the children, is now swallowed up in the payment of Nursing Home Fees. What causes most upset is the fact that all this happens when a surviving parent is ill and the family are distressed. So can it be stopped?

Of-course it can, although not many people know about the process. It is fairly simple. Both parents write a Last Will and Testament and also a Trust. You only need ten pounds to set up a Trust. I like to call the Trusts, Family Trusts. This is how the system works:

1. Make sure that the house is in Tenancy in Common. Most houses are not. They have been purchased in Joint Tenancy. This is wrong! Examine your deeds or get your solicitor to examine your deeds to ensure that the family home is in Tenancy in Common. In other-words each spouse owns half the property.


2. Make a Will. Both parents must make a will each. The main component of the Will should be the Trust into which the property, valuables, stocks and shares plus money can be placed. Put as much in the Trust as you can. The main beneficiary of the Trust will be the surviving spouse and both parents can do what they want with the estate while they are alive because the Trust does not come into effect until the first spouse dies.


3. Make a Trust each. It a process known as Equalising the estate. It doesn't matter how big the estate is.

That is it! That is all there is to it! It really is that simple. Everyone should do it.

Now what happens is that on the death of the first spouse, their half-house goes into the Trust and not to the surviving spouse. Should that spouse then have to go into a Nursing Home at a later date then their half-house is assessed. The Inland Revenue regards a half-house as valueless as far as assessment is concerned. So on paper the surviving spouse who goes into a Nursing Home, does so without funds, and so avoids having the house sold to pay Nursing Home Fees while at the same time reducing potential Inheritance Tax.

Please remember that this system is at its best whenever a spouse goes into care following the death of the first spouse. It is approved by the Revenue and it has been done before.

So to recap:

1. You must have your jointly owned property in Tenancy in Common. This is vital.


2. You must each write a Will and begin a Family Trust.

Thank you for taking the time to read this short article.