Trusts and Care Home Fees: Why Your Property May Still Be Assessed

Hi, it’s Graham Martin from Kingsbridge Wills and Trusts. I wanted to share a quick story from a meeting I had yesterday afternoon.

I went to see a lovely gentleman in his 90s to discuss his Lasting Powers of Attorney. Towards the end of our conversation, I asked him if there was anything else he wanted to talk about.

He’d already set up a will and created a trust, which is exactly the right approach. He had also placed a flat into that trust, under the impression that this would offer some protection against care costs. It seems that whoever originally helped him set it up may have sold the idea as a “protective trust.”

Now, there are some advantages to this setup. Primarily, upon his passing, the family would be able to sell the property without needing to obtain probate, potentially saving four to five months of time. So in that sense, it’s a bonus.

However, during the meeting with him and his two daughters, he mentioned, quite confidently, that he didn’t need to worry about the property being used to pay for care home costs. That’s when I had to gently correct him.

The flat in question is not his primary residence—it’s currently rented out. Because it’s not his principal private residence (PPR), if there were ever a local authority means assessment for care costs, the property could still be considered an asset. Even though it has tenants and generates rental income, it’s not providing a roof over his head—so it wouldn’t be excluded from the assessment.

Understandably, this came as a surprise to both him and his daughters.

As our conversation went on, we began discussing the overall size of his estate. In addition to the property, he also has a significant amount of cash. He made it clear that he has no intention of going into local authority-funded care. In fact, he’s planning to move into a high-end, five-star residential care home when the time comes, and he’s already got brochures for some in Barnet and Hertford.

That’s a great position to be in—he’s fully prepared and happy to fund his own care. But it’s important to understand that the original advice he received about the trust providing full protection from care costs wasn’t entirely accurate. In situations like this, it’s always worth reviewing the finer details to ensure everything works as intended.