Putting your house in a trust will not usually stop it being counted towards care home fees if avoiding those fees was one of the reasons for doing it. The local authority can treat this as a “deliberate deprivation of assets” and assess you as if you still owned the house, and there is no fixed time limit on how far back it can look. Trusts can still play a legitimate role, particularly trusts set up in a Will to protect a share of the family home, but they need to be planned carefully and well in advance.
As we age, it is natural to think about how best to protect our hard-earned assets for the future. You may be wondering whether placing your home in a trust could help you avoid care home fees.
While this can seem like an appealing option, the rules around care home fees and trusts are complex and strictly enforced. It’s important to understand that putting your home in a trust is not a guaranteed way to avoid costs entirely.
If you’re looking for ways to manage your assets effectively and reduce the financial impact of later-life care, our experienced Wills and Inheritance Tax Planning Solicitors and Lawyers can assess your situation and develop a strategy that aligns with your goals while protecting your interests.
For more information, please get in touch with our specialist solicitors or lawyers in Ashford, Cranbrook and Hythe.
Please be aware that this blog is for informative purposes only and should not be taken as legal advice.
What is a trust?
A trust is a legal arrangement that lets you transfer assets, which could include money, property or other high-value elements, to a trustee of your choosing. This is often someone in your close circle or family, but you can also consult professional trustees who have a job in managing finances for other people.
There are various reasons to put your home in a trust, but the biggest one for most people is to avoid unnecessary taxation and protect your assets. Different types of trusts offer a variety of benefits, but they also have different rules and implications.
Is it a good idea to put your house in trust?
There is no one-size-fits-all approach to avoid paying care home fees. Putting your house in a trust might suit you depending on your circumstances and what generations may be around to assist you with financial management and mitigating other costs.
However, as with all major financial decisions, putting your home into a trust should be considered with caution. Trusts can be complex and come with a range of legal implications, potential challenges, impacts on taxes and care fee assessments.
Can I put my property in a trust to avoid care home fees?
Local authorities will keep an eye on most major financial decisions that you make towards the end of your life. If you expressly put your house in a trust to avoid care fees, then it may be seen as a deliberate deprivation of assets. In this case, your property may still be considered a part of your assets when calculating care costs. There is no fixed time limit, so a transfer made many years earlier can still be looked at if avoiding care fees was a significant reason for it.
However, there are legitimate ways to utilise trusts for protecting assets from care home fees. Our solicitors can help you explore your options and ensure that you are using methods of asset protection that offer both long-term benefits for you and your family and are fully legally compliant.
How much do I have to pay towards care home fees?
In England, the local authority looks at your savings and assets (including your home, unless it is ignored under the rules below) when deciding who pays. For 2026/27, if you have more than £23,250, you will normally pay the full cost of your care yourself. If you have between £14,250 and £23,250, you pay a contribution from your savings and the council pays the rest. Below £14,250, your savings are ignored and you contribute from your income only. These limits have not changed since 2010, and different rules apply in Wales and Scotland.
What is the best trust to avoid nursing home costs?
Typically, a discretionary trust or life interest trust will be used as part of estate planning. A common example is a “property protection trust” in a Will, where each spouse leaves their share of the home in trust. This can stop the first spouse’s share being used to pay for the survivor’s care later on, and usually requires the home to be owned as “tenants in common”. Trusts set up during your lifetime are still subject to the deprivation of assets rules.
You might also consider transferring a house to a child to avoid care home fees, but there are a number of rules to consider that may impact how you may use the property in the future and the title deeds. Our guide Can I put my house in my children’s name to avoid inheritance tax? explains the risks.
The best trust for you will be dependent entirely on your circumstances and goals. A solicitor with expertise in trusts and estate planning can offer you valuable insight into the best way to achieve this.
What assets are exempt from care home fees?
Certain assets may not be included in care home fee assessments, and it’s important to understand these exemptions and how to utilise them properly.
Some of the assets that may be valid for exemptions include:
- Your share of a jointly owned property, which is valued at what a buyer would pay for that share alone (often much less than half the property’s value)
- Certain pension schemes (pension pots you have not yet drawn are not counted as savings, although the income you could take from them may be)
- Personal possessions like furniture, art and jewellery, unless they were bought to avoid care fees, and;
- Half of your private or workplace pension income, if you pass it to a spouse or civil partner who still lives at home.
- Your home, if your spouse or partner, a relative aged 60 or over, a disabled relative or a child under 18 you are responsible for still lives there.
- Your home for the first 12 weeks of a permanent care home stay.
What are the disadvantages of putting your house in a trust?
Setting up a trust can be expensive, as they can have ongoing administration fees. Trusts themselves also often have tax implications, particularly when it comes to capital gains tax and inheritance tax. For example, putting assets worth more than your available nil-rate band into most types of trust during your lifetime triggers an immediate Inheritance Tax charge of 20% on the excess. You also may lose some control and authority over your own property. Generally, it is mismanaged and poorly organised trusts that can lead to pitfalls, excessive expenses and possibly even disputes if they have unclear or restrictive terms.
If you are considering putting your home into a trust to avoid care home fees, speak to a specialist. They can ensure that whatever decision you make is not only in your best interest but properly executed.
How do I protect my inheritance from a nursing home?
Various strategies are available for protecting your inheritance from a nursing home, including creating a trust, purchasing financial products such as annuities, and restructuring your asset portfolio.
You are strongly encouraged to speak to a specialist as early as you can because planning done well in advance stands a much better chance of succeeding and ensures that once your care needs begin, even if that is sooner than you would have anticipated, you will be fully provided for.
Last-minute transactions will also draw more scrutiny from local authorities, so having a long-term plan in place is preferable.
By seeking professional legal advice, you can set up a timeline that ensures that you can financially ease into your future within care funding rules but not at the cost of your family’s inheritance. It is also worth making Lasting Powers of Attorney, so that someone you trust can manage your finances and make decisions about your care if you lose the ability to do so yourself.
Speak to our Wills, Probate and Powers of Attorney solicitors and specialist lawyers today
We recognise how important it is to feel reassured that your wealth can protect you through the later years of your life, even if unexpected costs occur.
Our practice is committed to ensuring that our elderly clients feel supported with a specialist team of Wills, Probate, and Powers of Attorney Solicitors and specialist Lawyers for Older Clients.
If you would like more expert insight into how to protect your assets, you can speak with one of our knowledgeable solicitors or lawyers in Ashford, Cranbrook and Hythe.