Wills For You

09/06/2023

A day out for Glynis

03/06/2020

We start by listening
And then with a few simple strategies, we can ensure that your home,
Savings and investments are protected.
Plans are at the
Heart of everything we do
For more information please call us on 07780009245 or email
[email protected]

05/03/2017

Thank you everyone for liking my page

16/03/2016

When is it “safe” to exclude family
from your Will?
April 2nd, 2011
An initially controversial story appeared in the papers this week (Daily Mail). Mrs Ilott who
had been estranged from her mother, Mrs Jackson, for over 30 years except for a brief trial
reunion over 10 years ago successfully claimed a share of her mother’s estate, despite Mrs
Jackson having a valid will which left everything, valued at over £480,000, to charity.
At the time of making her Will, Mrs Jackson was
very clear about her desire to leave her
daughter nothing, and even left a letter with
her will setting out her reasons, perhaps in the
hope that this would prevent her daughter
claiming a share. At no point was Mrs Jackson’s
mental state questioned, nor was the validity of
the Will.
At first glance, this looks to be hugely unfair.
Why should Mrs Ilott receive money from a lady
she appears to have hardly known? Why were
her mother’s clear and understandable wishes
set aside?
A closer look at the facts and the law may provide an answer. Many countries around the world have a
regime of forced inheritance. Parents simply cannot disinherit their children, no matter how much they
may want to. This is not the case in England and Wales, but, to compensate, the law does allow certain
individuals who have been disinherited, or who have received too little to make a claim for more.
Children, even adult children, are entitled to claim. They might not succeed, but they have the right to try.
The likelihood of success is based on a number of factors, not least the needs of the claimant. Put simply,
if a wealthy child and a poor child of the same person launch identical claims, the poorer child may well
have more chance of success.
Again, this doesn’t seem fair. But is it fair to ask the taxpayer to support someone when there is family
money available. Do a parent’s obligations stop, just because you, sadly, don’t get along with your child?
A court will look at all the evidence presented, and generally reach a just solution.
Could this have been prevented? Maybe. Mrs Jackson thought she had done all she could to show why she
had cut her daughter out of her Will. Sadly that wasn’t enough. Perhaps however, the litigation could have
been avoided if she had drafted her Will differently. The use of a trust might have been appropriate.
Complicated family circumstances sometimes call for complicated Wills. It is important, not just to take
advice, but to take advice from a specialist, such as a member of STEP, the Society of Trust and
Estates Practitioners.

07/12/2015

Banks v Goodfellow test is still the relevant test
for mental capacity over a hundred years on.
A landmark inheritance case
that went all the way to the
High Court confirms that the
correct test for mental capacity
when making a Will or looking
to contest one, is that in the 1870
case of Banks v Goodfellow and
not the subsequent test set out
in the Mental Capacity Act 2005.
Banks v Goodfellow.
Every member of STEP will be familiar with this case. Even W ill writers are aware of it.
Whenever they complete a Part B certificate in a lasting power of attorney, they say, ‘I am a
Will writer and I am familiar with the test for capacity in Banks v Goodfellow.’
It dates from 1870 and is still the leading authority – worldwide – on testamentary capacity and
it exerts a gravitational pull on other tests of capacity, such as the test in Re Beaney for
making a substantial lifetime gift.
So what actually happened in the Banks v Goodfellow case?
The chronology looks something like this:
John Banks was born in 1811 or 1812.He may have been a draper but whatever his
business, he must have been fairly successful, because he ended up owning 15 cottages in
Keswick. He had a sister of the whole blood, called Margaret Banks. They had a half
brother, called Jacob Banks, who was the father of the plaintiff in Banks v Goodfellow.
In 1838, when he was 26 or 27, John Banks made a Will in favour of his sister, Margaret. We
are told in the law report that in 1841, when he would have been 29 or 30, John Banks was
confined for the first time as a lunatic in the county lunatic asylum, and that: ‘Discharged after
a time from the asylum, he remained subject to certain fixed delusions. He had conceived a
violent aversion towards a man named Featherstone Alexander, and notwithstanding the
death of the latter some years ago, he continued to believe that this man still pursued and
molested him; and the mere mention of Featherstone Alexander’s name was sufficient to
throw him into a state of violent excitement.
On 16 March 1846, Margaret Banks married a grocer in Keswick named Thomas
Goodfellow. About ten months later, on 8 January 1847, Margaret died shortly after giving
birth to a daughter, who was named Margaret Banks Goodfellow. Thomas Goodfellow
subsequently remarried and had a son, who was the defendant in Banks v Goodfellow. For
some reason, the young niece, Margaret Banks Goodfellow, lived with her mentally infirm
uncle, John Banks, and, despite the fact that he owned so many rental properties, they
resided in lodgings in Arkleby with a landlady called Hannah Routledge. It is pretty obvious
that both of them needed someone to look after them, and this may have been the most
effective and economic way of achieving that objective. On 24 June 1860, the man toward
whom John Banks had conceived a violent aversion, Featherstone Alexander, died. From
September 1863 John Banks had a succession of epileptic fits. ’Shortly after he had this
succession of fits, John Banks contacted his agent, Joseph Tolson, who collected the rents on
his properties.
He asked Mr Tolson to bring George Ansell, a Solicitor in Keswick, with him when he came to
Arkleby to pay the next half-year’s rents. The interview on Wednesday 2 December 1863 Mr
Tolson and Mr Ansell travelled together from Keswick to Arkleby.
John Banks told Mr Ansell that he wanted to make a Will, and: ‘He fetched from his room a
Will which he had made in 1838 in favour of his sister, who had since died, and said he
wished to give all his property to his niece, Margaret Goodfellow, in the same way.
Mr Ansell then drafted a Will and got John Banks to sign it on an interim basis, pending the
preparation of a fair copy or engrossment. This was his usual practice when dealing with
clients in a rural community, when there was potentially a delay between taking instructions
and the final completion of the Will. After the matter of the will had been disposed of, there
was a general discussion about various business matters where John Banks suggested that
Mr Tolson might care to take a lease of his cottages in Keswick for seven years, and Mr
Tolson agreed and Mr Tolson handed him the current half year’s rents, partly in cash and
partly by cheque.. They came to just over GBP40, which he handed over partly in cash and
partly by cheque.
Finally, John Banks had a conversation with his landlady, Mrs Routledge, regarding the
amount he should be paying her each week for his board and lodging. Mr Ansell then returned
to Keswick and arranged for the Will to be engrossed, and on the first working day after
Christmas, Monday 28 December 1863, Mr Tolson returned to Arkleby with the engrossment
of the Will and the lease. John Banks read them two or three times and said they were alright,
after which he signed both documents and the Will was duly attested.
The deaths of John Banks and Margaret Banks Goodfellow.
About a year and a half later, on 28 July 1865, John Banks died. According to his death
certificate, he died of epilepsy, insanity and coma. Under the terms of his Will, his niece,
Margaret Banks Goodfellow, who was then 18, inherited his entire estate.
Margaret Banks Goodfellow herself died at Arkleby two years later, on 6 May 1867, aged 20.
The effect of Margaret’s death, underage and intestate, was that her estate – which included
John Banks’s 15 cottages in Keswick – passed to her paternal half-brother, who was not
related in any way to the late John Banks.
The case.
John Banks junior, the son of the testator’s late half-brother, Jacob, brought proceedings
to test the validity of the Will made on 28 December 1863 in favour of Margaret Goodfellow.
After all, his uncle had been a certified lunatic who had suffered from monomania, particularly
as regards his obsession with Featherstone Alexander. The trial took place before Brett J
(who later became the Master of the Rolls as Viscount Esher) at the Cumberland Assizes in
the spring of 1869. It was a jury trial, and in his directions to the jury Brett J told them that the
question they had to decide was: ‘… whether, on the 2nd of December, 1863, or on the
28th of December, 1863, or on both, the testator was capable of having such a
knowledge and appreciation of the facts, and was so far master of his intentions, free
from delusions, as would enable him to have a will of his own in the disposition of his
property, and act upon it.’
The jury returned a verdict in favour of the defendant, Mr Goodfellow, saying that the Will
‘was a good and valid Will’.
The appeal.
John Banks Jr then sought a retrial on the grounds that: Brett J had misdirected the jury; and
the verdict had been reached against the weight of evidence. The alleged misdirection was
that the judge: in leaving it to the jury to decide whether John Banks was free from delusions,
did not proceed to tell them that the delusions, under which he had undoubtedly before
laboured, might not have been present to his mind at the time of making the Will, yet, if they
were latent in his mind, so that if the subject had been touched upon, the delusions would
have recurred, he was of unsound mind and therefore incapable of making a Will. ’Essentially,
what the appellant was suggesting is that the Solicitor, who took John Banks’ instructions to
make the Will, should have baited him or wound him up by saying something deliberately
provocative such as: ‘Are you going to leave anything to Featherstone Alexander?’ As you will
recall, the mere mention of that name was sufficient to throw John Banks into a state of violent
excitement.
The appeal was heard by four judges of the Court of Queen’s Bench, in Westminster Hall, on
11 January and 13 May 1870. The Court of Appeal, as we know it, wasn’t established until
1875.The Chief Justice, Sir Alexander Cockburn, took eight weeks to write his judgment, and
he handed it down on 8 July 1870.
The judgment
The Court held that, for all practical purposes, Brett J’s direction to the jury had been correct. It
was immaterial whether the delusions remained latent or not at the time if the testator was
otherwise competent to make a Will, as the delusions had no influence upon him in disposing
of his property.
One of the reasons why Banks v Goodfellow is still cited and respected as a leading authority
worldwide is because the judgment contained an extensive overview of the law relating to
testamentary capacity, not only in England, but in a number of other jurisdictions. The Court
considered: eight earlier English cases, the earliest of which was the Marquis of Winchester’s
case in 1598; four French authorities, one German and one Italian on testamentary capacity;
Roman law, Dutch law and five decisions in American courts, about which the judge was
particularly complimentary.
‘It is essential to the exercise of such a power that a testator shall understand the
nature of the act and its effects; shall understand the extent of the property of which he
is disposing; shall be able to comprehend and appreciate the claims to which he ought
to give effect; and, with a view to the latter object, that no disorder of the mind shall
poison his affections, pervert his sense of right, or prevent the exercise of his natural
faculties – that no insane delusion shall influence his will in disposing of his property
and bring about a disposal of it which, if the mind had been sound, would not have
been made.’
Conclusion
Recently there have been several decisions and a number of articles questioning whether the
Banks v Goodfellow test is still appropriate in this day and age, and whether it has been
superseded by the Mental Capacity Act 2005. There have been one or two comments to the
effect that: ‘Psychiatry has come a long way since 1870. Of course psychiatry has advanced
considerably in the past century and a half. Nowadays John Banks would be treated by
powerful anti-epileptic drugs for his succession of fits, instead of having a blister of mustard
and muslin or vinegar and brown paper applied to his head, however Banks v Goodfellow has
nothing to do with psychiatry. That’s where the Judicial Committee of the Privy Council got it
wrong in Waring v Waring. It allowed fashionable views in psychiatry or neuroscience to
undermine and usurp the traditional legal test for assessing testamentary capacity. The Mental
Capacity Act doesn’t supersede Banks v Goodfellow, it merely complements it.
The Act requires that: someone should be able to understand, retain, and use and weigh
the information relevant to the particular decision they are making at a particular time.
What Banks v Goodfellow does is summarise – in simple and succinct terms – the information
that is relevant to the decision of making a Will. Essentially, this information has been the
same since time immemorial and, unless there is some major evolutionary change in human
nature itself, it will continue to be the relevant information evermore.

25/11/2015

24/11/2015

A husband left his wife just one farthing in his will - after she branded him a “rotten old pig” because he broke wind.

22/11/2015

What Makes a Will Valid ?
An introduction to the requirements of a legally binding will
For a will to be legally binding a number of requirements must be met. The requirements are complex and legal advice should always be sought before making a will. The reason for this is that if the requirements are not met the will is likely to be rendered invalid, which could result in the deceased’s assets being distributed other than in accordance with his or her wishes.
This article does not intend to be a substitute for legal advice but rather sets out briefly what the requirements of a legally binding will are. They are as follows:
Capacity
The testator (the person who made the will) must have been capable of making a valid will at the time when the will was made.
To be capable of making a valid will the testator must ordinarily be aged 18 years or over, although there are certain exceptions to this rule.
The testator must also be of sound mind, memory and understanding. Essentially, a person must know and appreciate what they are doing when they make a will.
If a person lacks the mental capacity to make a will an application to the Court of Protection can be made under the Mental Capacity Act 2005. However, the Mental Capacity Act 2005 will not assist where the will has already been made by a person of unsound mind.
Intention
The testator must have clearly intended to dispose of his or her property, in the manner set out in the will, on his or her death. If the will has been validly executed and the testator was of sound mind when the will was made such intention will normally be assumed.
Undue Influence, force and fraud
If a testator is unduly influenced (coerced or pressured) or forced into making the will, a Court may set aside the will in its entirety or in part. Similarly, a Court may set aside a will or part of a will if the ex*****on of a will was obtained by fraud or if it was forged after the person’s death.
The format of the will
In the majority of cases the will must be in writing for it to be valid, although there are certain exceptions to this general rule. It must also be signed by or on behalf of the testator, and the signature must be made or acknowledged in the presence of 2 witnesses present at the same time.
A will can be written in ink or can be typed.

Signature
In the majority of cases the will must be signed by the testator, or by some other person in his or her presence and by his or her direction. Normally the testator will sign the will at the end of the will, although this has not been a legal requirement since 1982. Where a will consists of several pages, it is not necessary for the testator to sign them all, so long as all the pages are attached at the time of ex*****on of the will.
The testator should either sign his or her will or acknowledge his or her signature in the presence of 2 or more witnesses present at the same time.
Attestation
The testator should either sign his or her will or acknowledge his or her signature in the presence of 2 or more witnesses present at the same time. Each witness should then either attest and sign the will or acknowledge his signature, in the presence of the testator. It is good practice to use an attestation clause for this purpose.
Alterations
Any alterations made in a will after it has been executed will not be valid unless the alterations have themselves been duly executed.
Revocation
As a general rule, a will is revoked upon the marriage of the testator or if the testator enters into a civil partnership. A will can also be revoked by a testator executing a later will or codicil or by making a written declaration declaring his or her intention to revoke the will. A will can also be revoked by a testator intentionally destroying the will. Once a will has been revoked it will no longer be valid.

20/11/2015

LAST WILLS – LAST LAUGHS
How to make a last Will and testament get the last laugh
Here are some hilarious quotations from past wills. Enjoy – and if you have quotes of your own about Wills, get in touch and we’ll add it to our quotes page:
Bitter Wills
Anthony Scott, in his last will and testament wrote: ‘To my first wife Sue, whom I always promised to mention in my will. Hello Sue!’
Conditional Wills
The last will and testament of Edith S of Walsall included £50,000 to each of her children, Roger, Helen and Patricia. Their inheritance was not to be spent on ‘slow horses and fast women and only a very small amount on booze’.
Gaffs in Wills
One well-meaning will maker gave a legacy to ‘The Royal Society for the Prevention of Birds”.
By bizzarr co-incidence, Frank Clifford’s last will and testament included a legacy to the ‘Royal Society for the Protection of Cruelty to Animals’
Mad Wills
Charles P of Bangor, North Wales left his real estate in his will to BEN, the motor and Allied Trades Benevolent Fund. This quote from his last will and testament reads “I wish to be buried in a coffin linked with perspex and filled with industrial alcohol, and he stated “I abdicate a title ‘King Charles I of Wales’ which I claimed in 1977″
Tipsy Wills
A quote from the will of Roger Morris of Penzance who gave £250 for the RNLI “to be spent on a booze-up for the members and helpers of the Penlee lifeboat crew.”
Caustic Wills
Sara Clarke of Bournmouth directed in here will: To my daughter, I leave £1 – for the kindness and love she has never shown me.
Warm Wills
“I give to Stonyhurst Jesuits the sum of £500 for the purchase of thermal underwear” – Rosaleen S’s last will testament, West Yorkshire.”
Odd Wills
“…and my ashes shall be handed to Susan H to be scattered in the Chihuahua ring at the Three Counties Show after judging has taken place. – Last will and testament of Irene Y of Swindon”.
Surprising Wills
“…and I give the residue (estimated value £1.9 million) to the National Debt Commissioners for the relief of the National Debts”
Cheeky Wills
Another last will with a last laugh: “I wish peace and affluence to all my friends and a piece of effluence to all my enemies”
Wills can contain conditons
In Henry Budd’s last will and testament he left £200,000 in 1862 in trust for his two sons on the condition that neither grow a moustache. In another Will, Matthias Flemming shared his dislike. He left his employees £10 each in 1869; those with moustaches only got £5 however.
Innumerate Wills
Wills can contain pure gaffs. In his will Philip Hall, professor of pure mathematics, managed to make 2+2+5 =10.
Vengeful Wills
One man left his employer one shilling to buy a book on manners.

Feline Wills
One cat-loving lady left her whole house to be used to provide for her cat. The lady’s funeral was to be held on a clear summers day, and her cat was sunning itself lazily on the drive outside when sadly it was run over by the hearse.
…And canine Wills
Miss Amy T of Doncaster left £500 to the Doncaster Branch of the RSPCA, requesting it be used to provide dinners at Christmas for dogs in their care.
So go on now, and make yours.
Call Anthony Heath
Wills For You
T 01782 361971
M 0778000 9245

19/11/2015

Executors

An executor is the person responsible with administering a deceased person’s estate in England, Wales and Northern Ireland. You can appoint an executor by naming them in your will. The courts can also appoint other people to be responsible for doing this job.

If the person who has died leaves a will

In this case one or more 'executors' may be named in the will to deal with the person's affairs after their death. Any number of executors can be appointed but only four can apply for the grant.

The executor applies for a 'grant of probate' from a section of the court known as the Probate Registry. The grant is a legal document which confirms that the executor has the authority to deal with the deceased person's assets (property, money and possessions). They can use it to show they have the right to access funds, sort out finances, and collect and share out the deceased person’s assets as set out in the will.

If the person who has died didn't leave a will

If there is no will, a close relative of the deceased can apply to the Probate Registry to deal with the estate. In this case they apply for a 'grant of letters of administration'. If the grant is given, they are known as 'administrators' of the estate. Like the grant of probate, the grant of letters of administration is a legal document which confirms the administrator's authority to deal with the deceased person's assets.

In some cases, for example, where the person who benefits is a child, the law states that more than one person must act as the administrator.

As a last resort the Public Trustee (an independent public body appointed by the Lord Chancellor) can act as an executor. It may be appropriate to appoint the Public Trustee as executor if there is no one else able and willing to act as executor or where a beneficiary is an incapacitated adult or dependent child likely to outlive both parents and other close relatives.

Appointing an executor

You should choose an executor to carry out your wishes, as stated in the will. Executors can be beneficiaries under the will and often people appoint their spouse, civil partner or children as executors. Check with your proposed executors that they are willing to take on this role before naming them in your will, as it can involve considerable responsibility.

Consider naming more than one executor in case one dies before you.

It may also be easier for the executors if there is more than one person to share the work and the responsibility. The executors may have to deal with any day to day administration of your estate in the period before it can be distributed. Executors can claim from the estate for expenses incurred in carrying out their duties.

If the estate is large or complicated, there may be advantages in appointing a professional executor such as a solicitor, accountant or bank manager. A professional executor will charge for the work that they do and these costs will have to be met from your estate. Ask for details of the likely costs before appointing the executor to check that you are comfortable with them.

Choice of executors

You should consider 3 main categories of potential executors:
•individuals
•professional people (solicitor, accountant)
•trust corporation

They all have advantages and disadvantages which need to be considered in the light of the circumstances. You should take into account the following:
•availability
•suitability
•willingness to act
•any possibility of conflict or dispute
•the possibility of predeceasing (a substantial provision should then be made)
•the size, nature and location of the estate, and the extent and complexity of burden placed on executors
•the costs involved

Where professionals are chosen as executors, they may be appointed as individually named persons or as a firm.

Executors like trustees, are in a fiduciary relationship so they cannot make a profit out of their office. They may only claim out of pocket expenses. Therefore, a charging clause must be included, authorising them to charge for all work done by the executors or their firm in administering the estate.

There is no legal objection to a beneficiary being appointed as an executor where he or she is the sole beneficiary, or where the estate is small or uncomplicated.

Understanding the Role of an Executor

An executor has to carry out certain tasks in order to legally fulfill the obligations of the task. An executor you should therefore:
•obtain a copy of the medical certificate indicating cause of death and a formal notice from the doctor if the family members to not wish to do so
•register the death at the local Registry of Births, Deaths and Marriages if there are no family members wishing to do so. The death must be registered in order to obtain the death certificate. Nb. It is advisable to get more than one copy as it will be needed when dealing with Insurance companies, pension providers etc
•could be responsible for making sure any last wishes such as organ or body donations are carried out. The job might also include planning for the funeral or cremation and arranging for payments for the services provided
•make sure you have the last original will of the deceased. The testator should have notified you as to the location of this
•locate all the heirs. This might seem like an easy task and if there are just a couple of children and they are the only ones named in the will, it is easy. If there are numerous heirs and they are named in the will either collectively or individually, the executor must locate each and every one
•make and exhaustive list of all the assets of the estate, from personal to real property, to bank accounts, investments etc. and also all the debts including credit cards, utility bills, loans etc
•it is advisable to open a separate account into which money paid into the estate can be credited. This will prevent estate monies being confused with personal finances
•notify all businesses of the death e.g. utility companies credit card companies, banks, council tax offices, social security etc
•make sure that all the deceased’s debts are settled before the estate is distributed to the beneficiaries
•if there are minor or dependent children, the executor could be responsible for arranging for their care and placement. The deceased might have their wishes stated in the will but if not, the courts might need to be involved in the placement. If there are pets, the executor will need to care for them and make arrangements for their continued care
•pay any Inheritance Tax necessary
•you must declare the value of the estate to HMRC on an Inheritance Tax return, within 12 months of death
•payments of the deceased’s tax is your personal responsibility. Failure to submit an accurate account to HMRC may leave you open to personal liability or penalty
•contact the local Probate Registry to either obtain the Grant of Probate or the Grant of Administration
•distribute the contents of the will making sure that if anything is to be left to minors, a trustee has been named
•after you have completed all of your tasks, you will need to produce a full set of accounts for the beneficiaries showing the estate assets and liabilities, administration income and expenses and how the estate has been distributed

18/11/2015

When would I have to pay for Care?

Means Testing - Upper and Lower Limits (England & N.Ireland only)

If you own more than the upper limit currently £23,250 (please see below for Scotland & Wales), (which includes your property, any cash or savings and stocks and shares) you will be expected to fund the full cost of your care fees. You would not be able to receive any financial help from your local council until your savings (assets) have been reduced to the upper limit.

If you have less than the upper savings limit or, when your savings drop to this limit, the local council will then assess your ability to pay based on both your capital and income.

If you have assets below the lower limit currently £14,250 (please see below for Scotland & Wales) then any contribution you may be required to make towards the cost of your care will be based solely on your income and your assets disregarded.

Scotland - upper savings limit is £24,750 and lower threshold £15,250
Wales - upper savings limit is £23,750 but the lower threshold is also £23,750, therefore there is no staggered period on part payment by the Local Authority / client.

Losing Your Home to Care.

If you own your own home then it’s value will usually be counted as capital. There are some important exceptions to this rule.

Your property will be disregarded for the first 12 weeks after you enter care permanently.
If your husband, wife, unmarried partner or civil partner lives in your home then it’s value will not be counted as capital.
If a relative aged 60 or over lives in your home, it’s value will be ignored.
If a relative under the age of 60 who is incapacitated (ie. receiving Incapacity benefit or disability Living allowance) lives there, then again the value will be discounted.
If your home is occupied by your estranged or divorced partner and he or she is a lone parent with a dependent child, it’s value will be ignored.
The value of your property should be ignored if you are liable to maintain a child under the age of 16 and your house is the child’s main home. The child must be either a relative of yours or a relative of a member of your family.
There are other situations in which the council may ignore the value of your home at their discretion.

If you jointly own your home with someone who does not fit into any of the above categories ie. a relative under the age of 60 or a friend, then in this situation the council will designate a value to your Interest in the property. The value will depend on the price that your share of the property could be realistically obtained from what is termed as a willing buyer.

If your co-owner is unable or unwilling to buy your share from you, your interest in the property could be held to be worth nothing. This is because it is highly unlikely that an outsider would want to buy into a property when this would involve sharing it with someone else. ( Charging for Residential Accommodation Guide- Department of Health- C.R.A.G Regulations Section 7.019 of the Social Securities act 1970.)

You are most at risk of losing your home to care costs when you enter care after owning your home jointly with a spouse, unmarried partner, or civil partner and they have passed away. The full capital value of your home will have passed to you and you will be assessed on the property’s full value along with any formerly joint held assets, such as savings.

Whilst the council cannot force you to sell your home, if you are unable to cover your care home fees the money you owe your local council will mount up. However, the local council can allow you to defer part of your contribution if you are unable or unwilling to sell your home and you do not have enough income or other assets to cover your full fees. This will be seen as an interest free loan or a deferred payments agreement and will be paid back when your property is eventually sold, or when your estate is wound up.

The deferred payments agreements could involve a legal charge being placed on your property. The amount of money you owe will then start to incur interest 56 days after your death, or the date you terminate the deferred payments agreement. You may also have to cover any legal costs involved in placing such a charge. These costs will have to be paid up front and will not be added to your deferred payments.

Although you are able to defer the part of contribution that is based on the value of your home, you will still have to contribute any other assets or income you may have towards the costs of your care home fees.

In certain circumstances the local council may refuse to enter into a deferred payments agreements. They must state their case in writing to you and you will have the option to complain about their decision.

How Can I Prevent My Home Being Sold?

Most people work hard throughout their lives and want whatever assets they have built up to be passed down to their children and grandchildren, so losing their property to care costs is a severe blow.

The simplest way to avoid this happening is to firstly change the way in which your property is owned. Most people when buying a property with another person have the property set up as Joint Tenancy and whilst this may be the correct way to own a property in certain circumstances, for the vast majority of people this is not the best way to own a property for either Care Cost issues or Inheritance Tax liabilities.

Severing the tenancy on the property and changing the ownership to Tenants In Common, so you now each own 50% of the property (percentages of ownership can vary according to individual requirements) and then by setting up mirror Wills, each bequeathing the Testator’s share of the property to either a Property Trust or Family Trust can ensure that your home is not lost to care.

On the first of you to die their share of the property is left to the Trust, whose beneficiaries will be the spouse or partner, children, grandchildren or other named beneficiaries. Whilst the surviving partner continues to reside in the property there are no issues but once the survivor goes into care this is when property and assets will be assessed for care costs.

Once again the council would designate a value to the survivor’s interest in the property and once again the value would be dependant on the price that could be obtained from a willing buyer.

As before, it is highly unlikely that an outsider would be willing to purchase a property when part of it could be legally occupied by any of the beneficiaries named in the deceased personsTrust (usually his or her children/ grandchildren) and so, the value of the person’s share entering care would be held as being nil.

So I Can Protect My Property, But What About My Other Assets?

As previously stated, when entering Care all assets, property and income will be assessed.

Assets such as Cash, Stocks and Shares, Bank and Building Society accounts, PEPS and ISAs etc will be determined as liquid assets and in addition to any income received will be assessed for Care.

By changing the way your assets are both held and invested will ensure that they are not assessed for care costs.

As stated under the Department of Health CRAG regulations Section 6

The treatment of investment bonds in the financial assessment for residential accommodation is complex because, in part, of the differing products which are on offer. For this reason councils should seek the advice of their legal departments when they arise. However, it is possible to offer some general advice and councils are referred to the Social Security Commissioners decision R (IS) 7/98

Section 6.004 states that-

Councils are advised that if an investment bond is written as one or more life insurance policies that contain cashing-in rights by way of options for total or partial surrender, then the value of those rights has to be disregarded as a capital asset in the financial assessment for residential accommodation (see paragraph 15 schedule 10 of the Income Support (General) Regulations 1987. In contrast, the surrender value of an investment bond WITHOUT life assurance is taken into account.

Amendment 22nd October 2004

Section 6.005 states

Income from investment bonds, with or without life assurance, is taken into account in the financial assessment for residential accommodation.

Actual payments of capital by periodic instalments from investment bonds, with or without life assurance, are treated as income and taken into account provided that such payments are outstanding on the first day that the resident becomes liable to pay for his / her accommodation and the aggregate of the outstanding instalment and any other capital sum not disregarded, exceed the current levels allowed.