Selling a home to put a loved one into care

If you have a loved one that requires long term care, whether it be a result of age, a medical condition or anything else, one of the things often first thought is the financial cost of it. In many cases that leads to wanting to sell their home in order to fund the care they need.

It can be a complex and emotional process, but one that ultimately is in their best interests too. There will be legal considerations to take, as well as of course financial ones too but it may be the necessary step to ensure your loved one gets the best quality of life in the medium and long term.

If you are in this position, then a good place to start is with some research, and here are a few things you need to know and look into a little further…

Assessing the Need for Care

Before considering the sale of a property, it is essential to thoroughly assess the level of care your loved one requires. Care homes can offer different levels of support, from residential care (where help with daily activities is provided) to nursing care (which includes medical support). The costs of these services can vary significantly depending on location, the type of care needed, and the quality of the facility.

In the UK, the local council can conduct a needs assessment to help determine the appropriate care for your loved one. Following this, a financial assessment will evaluate whether they qualify for local authority assistance or will need to fund the care themselves.

Understanding the Financial Thresholds

In England, those with savings and assets above £23,250 (including property) are typically required to pay for their own care. If your loved one’s total assets fall between £14,250 and £23,250, they may receive partial funding from the local authority. Below the £14,250 threshold, the council may cover most or all of the care costs.

When a person moves into a care home permanently, their home is usually considered part of their assets. However, there are exceptions. For instance, if a spouse, partner, or another dependent relative continues living in the property, it will not be included in the financial assessment.

The 12-Week Property Disregard

If your loved one moves into permanent care and their property is part of their financial assets, the local authority will initially disregard the home’s value for the first 12 weeks. This is known as the 12-week property disregard. It gives families time to decide whether to sell the property, rent it out to generate income, or explore other funding options. During this period, the local authority may help with care home fees.

Deferred Payment Agreements (DPA)

A deferred payment agreement (DPA) allows individuals to delay selling their home until after they pass away or choose to sell it later. Under a DPA, the local authority pays for the care upfront, and the money is repaid from the sale of the property at a later date. This scheme can relieve some of the immediate financial pressure and provide more time to make the best decision.

However, a DPA is not available to everyone, and certain criteria must be met. For example, the local authority will need to assess the property’s value and ensure that there is enough equity to cover the care costs. Interest may also be charged on the amount deferred, so it’s essential to fully understand the terms before committing.

Selling the Property

If you decide that selling the property is the best course of action, it’s essential to plan carefully. Selling a home can take time, so starting the process as early as possible is advisable, especially if there are no alternative sources of funding.

When selling the home of a loved one who has moved into care, you may need to consider legal arrangements such as lasting power of attorney (LPA). If your loved one lacks the mental capacity to manage their financial affairs, an LPA allows someone else to handle the sale and other financial matters on their behalf. If an LPA is not already in place, you may need to apply for deputyship through the Court of Protection, which can take longer and involve additional costs.

Additionally, it’s important to consider any emotional attachment to the home. Selling a family property can be a difficult decision, so allowing time for family discussions and understanding everyone’s feelings about the process can help mitigate the emotional strain.

Consider Other Funding Options

Before selling a home, it’s worth exploring other options that could help cover care costs. These include:

Equity release: If your loved one still lives at home but needs care, equity release allows them to access money tied up in the property without selling it.
Pension or savings: Depending on the situation, other financial resources such as pensions, savings, or investments could be used to fund care.
NHS Continuing Healthcare: If your loved one has complex health needs, they may qualify for NHS Continuing Healthcare, which covers the cost of care.

Ultimately, it’s all about making the right decision for your loved one and finding the most manageable financial solution in which to do so. But with so much to consider, it’s important you know the facts before beginning to take the steps to get them the help they need.

We hope you found this blog post Selling A Home To Put A Loved One Onto Care: What You Need To Know useful. Be sure to check out our post Home Improvement Projects to Tackle Before Selling a Home for more great tips!