Minimising Care Costs

Care Home Fee Planning in Scotland: What Really Works?

We are often consulted by clients seeking advice on how to avoid paying for residential care if they need to move into a care home.

Let’s be clear: there is no guaranteed way to avoid care charges entirely. Any elaborate scheme that claims to eliminate care charges is likely to be flawed — and may even backfire.

How are care charges assessed?

In Scotland, if you have capital over £26,500, you’ll be expected to meet the full cost of your care until your capital falls below that threshold.

Capital includes:

• Property (unless exempt)
• Savings and current accounts
• ISAs, stocks, shares, Premium Bonds
• Cash and other financial assets

--- Learn more about planning for later life

Is my home included in the assessment?

Good news: your house is exempt from assessment as long as it’s occupied by your spouse or certain qualifying relatives. But don’t get clever — planting a distant cousin in the spare room right before you go into care won’t fool anyone.

The exemption only applies if the house is genuinely their residence.

What doesn’t work? Family Asset Protection Trusts

You may have seen these promoted as a guaranteed solution — but they’re not.

A Family Asset Protection Trust involves transferring your house or other assets into a trust for no payment. Councils are wise to this. If they believe you did it to avoid care fees, they can simply ignore the transfer and treat you as still owning the asset.

And they can look back indefinitely — not just seven years. That “seven-year rule” applies to Inheritance Tax, not care home assessments.

We were offered the chance to sell these schemes, and we said no — because they don’t work, and we won’t recommend something we wouldn’t use ourselves.

What might work? Liferent and fee

A life-rent and fee is a traditional Scots Law trust arrangement. You retain the right to live in the house (the liferent) while transferring ownership (the fee) to your children or others.

This could help — if:

• You do it well in advance of care being needed, and
• You have a plausible, documented reason for the transfer other than avoiding care charges

Even then, there’s no guarantee. The further in advance it’s done, the better. If you do it a year before going into care, it likely won’t stand up to scrutiny.

--- Liferent Trusts in Scotland

What definitely helps? Reviewing title and Will structure

This is where practical legal planning makes a real difference.

Most couples own their home with a survivorship clause — meaning when one dies, the property automatically goes to the other. That’s useful in your younger years, but risky when care fees are involved.

Here’s why:

• If one spouse is in care, the house is protected while the other lives in it.
• But if the spouse living in the house dies first, survivorship means 100% of the house passes to the spouse in care — and becomes assessable.

The solution? Remove the survivorship clause and update your Will. You can leave your half of the property to your children (or others) with a liferent for your spouse. That means they have the right to live in the home, but don’t legally own it.

This protects at least half the value of your home — and doesn’t involve gifting or risky transfers.

--- Talk to us about updating your Will

--- Transferring property through your Will — what to know

Why this method work?

Unlike trusts or early gifting, you’re not transferring ownership now — you’re setting up a future pathway through your Will and title. That means the local authority can’t challenge it as “deprivation of assets,” because nothing has been given away.

It’s a simple, cost-effective, and legal way to protect value for your family.

Need help planning?

Care fee planning is a complex and sensitive area of the law. The earlier you plan, the more options you’ll have. At Hastings Legal, we’ve advised hundreds of clients across the Borders and beyond.