My Spouse Needs a Care Home — What Happens to Our House?

When a spouse needs to move into a care home, the immediate worry for most couples is: what happens to our house? It’s one of the most common — and most frightening — questions we hear at MP Estate Planning. With residential care in England averaging £1,100–£1,300 per week and nursing care reaching £1,400–£1,500 per week (and significantly more in London and the south-east), it’s no wonder families are concerned.

The good news is that while your spouse is still living in the family home, the property is generally disregarded in the local authority’s financial assessment. The home cannot be forcibly sold while a spouse, partner, or certain other qualifying people continue to live there. However, the situation becomes far more complex when the remaining spouse eventually needs care themselves, or after they pass away — and that’s where proper planning makes all the difference.

In this article, we’ll walk you through exactly how care home admissions work in England and Wales, how the means test treats your property, what protections exist, and — crucially — what steps you can take now to protect your home for the long term. Between 40,000 and 70,000 homes are sold every year in the UK to fund care. With the right planning, yours doesn’t have to be one of them.

Key Takeaways

• While a spouse continues to live in the family home, its value is disregarded in the local authority’s financial assessment of the spouse in care.
• The real risk to the property arises when the remaining spouse also needs care or passes away.
• How you own the property — as joint tenants or tenants in common — has significant implications for care fee planning and inheritance.
• Proactive planning using tools such as lifetime trusts, severing the joint tenancy, and Lasting Powers of Attorney can protect the family home.
• Care fee planning sits at the intersection of trust law, tax law, and property law — working with a specialist alongside your solicitor ensures every angle is covered.

Understanding the Care Home Process

The decision to move a loved one into a care home is never easy, and understanding the process in England and Wales is crucial. Knowing what’s involved — from the initial needs assessment to the financial assessment — helps you prepare and make informed decisions while you still have options available.

What is a Care Home?

A care home provides long-term residential care and support for individuals who need help with everyday tasks such as bathing, dressing, eating, and managing medication. In England, care homes are regulated by the Care Quality Commission (CQC). There are two main types: residential care homes (providing personal care) and nursing homes (providing personal care plus 24-hour nursing care from registered nurses). Both offer a safe, staffed environment, but nursing homes are significantly more expensive — typically £1,400–£1,500 per week compared to £1,100–£1,300 per week for residential care. In London and the south-east, costs can reach £1,700 or more per week.

Why Might Someone Need a Care Home?

There are various reasons why someone might need to enter a care home. Common reasons include:

• Increasing care needs that can no longer be safely met at home, even with domiciliary care
• Chronic health conditions such as Parkinson’s disease, stroke recovery, or heart failure requiring ongoing support
• Dementia or other cognitive impairments that make living independently unsafe
• Social isolation combined with physical frailty, where a supported community setting improves quality of life

When a spouse requires care home services, it can have significant consequences for the remaining spouse, including potential impacts on their home and finances. Understanding these implications before you’re in crisis — not during it — is vital.

The Assessment Process

In England, the local authority has a legal duty under the Care Act 2014 to carry out a needs assessment for anyone who appears to need care and support. This is separate from the financial assessment (means test) and considers only the person’s care needs. The needs assessment is typically conducted by a social worker or healthcare professional and includes:

• Reviewing the individual’s medical history, diagnoses, and current health needs
• Assessing their ability to perform daily living tasks (washing, dressing, eating, mobility, continence)
• Evaluating their cognitive function, emotional wellbeing, and risk of harm
• Considering whether their needs can be met at home or whether residential care is required

If the needs assessment determines that residential care is required, the local authority then conducts a financial assessment (means test) to establish how much the individual must contribute towards their care fees. This is where your property, savings, and income come into sharp focus.

For more information on how care home fees can impact your property, you can visit our guide on care home fees and your property to understand the implications and plan accordingly.

Legal Implications of Entering a Care Home

When a spouse enters a care home, several important legal considerations come into play — particularly around who can make decisions on their behalf and how the couple’s assets are managed. Getting the right legal documents in place before capacity is lost is absolutely critical. Once someone lacks mental capacity, your options become significantly more limited, more expensive, and more time-consuming.

Lasting Power of Attorney

A Lasting Power of Attorney (LPA) is arguably the single most important legal document you can put in place. An LPA allows a trusted person (the “attorney”) to make decisions on behalf of someone who can no longer make those decisions themselves. Without an LPA, even a spouse has no automatic legal authority to manage their partner’s finances, sell property, or make decisions about their care.

There are two types of LPA in England and Wales:

Both types of LPA must be registered with the Office of the Public Guardian before they can be used. Registration takes several weeks, so it’s essential to get this done well in advance. If you wait until your spouse has already lost capacity, it’s too late to create an LPA — you would instead need to apply to the Court of Protection for a deputyship order, which is more expensive, more intrusive, and can take many months.

Mental Capacity Assessment

Mental capacity is assessed on a decision-specific and time-specific basis under the Mental Capacity Act 2005. A person is deemed to lack capacity if they cannot understand the information relevant to the decision, retain that information, use or weigh it as part of the decision-making process, or communicate their decision. The assessment is typically carried out by a healthcare professional — often the person’s GP or a psychiatrist.

If a person is assessed as lacking mental capacity, decisions must be made in their best interests. If an LPA is in place, the appointed attorney makes these decisions. If no LPA exists, the Court of Protection may need to appoint a deputy — a process that involves court fees, ongoing supervision, and annual reporting to the Office of the Public Guardian.

The key message here is simple: plan, don’t panic. Put both types of LPA in place while you and your spouse both have full mental capacity. It’s one of the most important things you can do — and one of the least expensive. The cost of an LPA is a fraction of the cost of a deputyship application, and the process is far less stressful for everyone involved.

Ownership of Your Home

When one spouse enters a care home, the ownership structure of your home becomes a critical factor in the financial assessment. The way you hold your property — and the specific type of co-ownership — can make an enormous difference to whether the home’s value is included in the means test, both now and in the future.

Most couples don’t even know how they own their home. They assume it’s “ours” — and legally it is, but how it’s jointly owned matters hugely. There are two fundamentally different types of joint ownership in England and Wales, and the distinction between them is one of the most important things to understand in care fee planning.

Joint Ownership vs. Sole Ownership

Joint ownership means both spouses are named on the title at the Land Registry and both have a legal interest in the property. Sole ownership means only one spouse is on the title. The distinction matters because:

• If the spouse entering care is the sole owner: The property’s full value could potentially be assessed (though it will be disregarded while the other spouse continues to live there).
• If the property is jointly owned: Only the care home resident’s share is relevant to the financial assessment — but the property is still disregarded while the other spouse occupies it.
• If the spouse remaining at home is the sole owner: The property may not be considered at all in the care home resident’s financial assessment, as it doesn’t belong to them.

The critical point is that the property disregard protects the home while a spouse (or certain other qualifying people) continues to live there. The real risk arises later — when the remaining spouse also needs care or passes away. At that point, the full property value comes into play.

Tenants in Common vs. Joint Tenants

Within joint ownership, there are two subcategories that have very different legal consequences: joint tenants and tenants in common.

Why does this matter for care fees? If you own as joint tenants and one spouse dies, the surviving spouse automatically owns 100% of the property. If that surviving spouse then needs care, the entire property value is in their name and assessable. However, if you own as tenants in common, the first spouse to die can leave their share to someone else — typically their children — via a will trust. This means when the surviving spouse is later assessed for care, they only own their 50% share. The other 50% belongs to someone else entirely.

Severing the joint tenancy (changing from joint tenants to tenants in common) is a straightforward legal step that can be done at any time by serving a notice — it doesn’t require the other owner’s consent, though it’s always advisable to do this openly and as part of a proper planning strategy. However, it only delivers its full protective benefit when combined with appropriate will planning, typically using a life interest trust (also known as an interest in possession trust) within the will. This gives the surviving spouse the right to live in the property for their lifetime while the deceased spouse’s share is held in trust for the children.

It’s worth noting that this type of planning should be done well in advance of any care need. If it’s done when care is already foreseeable, the local authority may argue that it constitutes a deprivation of assets — a deliberate disposal of assets to avoid paying care fees. Unlike the seven-year rule for inheritance tax, there is no fixed time limit for deprivation of assets claims — the local authority can look back indefinitely. However, the longer the gap between the planning and the need for care, the harder it is for the local authority to prove that avoiding care fees was a significant operative purpose.

By understanding the nuances of property ownership, you can take meaningful steps to protect your home. As Mike Pugh often says, “Trusts are not just for the rich — they’re for the smart.” The difference between doing nothing and putting the right ownership structure in place could be worth hundreds of thousands of pounds.

Financial Considerations

When a spouse enters a care home, the local authority conducts a financial assessment that can have a dramatic impact on the couple’s finances. Understanding exactly how this assessment works — and what is and isn’t included — is essential for protecting your assets.

What Happens to Joint Assets?

Under the Care Act 2014 and the associated Care and Support (Charging and Assessment of Resources) Regulations, only the care home resident’s own assets are assessed in the means test — not those of the spouse remaining at home. However, this doesn’t mean joint assets are safe. The local authority will assess the care home resident’s beneficial share of any jointly held assets.

For jointly held savings accounts, the local authority will typically assume a 50/50 split unless there’s evidence to the contrary. For property held as tenants in common, they will assess the resident’s defined share. For property held as joint tenants, the position is more complex — but while the other spouse continues to live in the property, the mandatory property disregard applies.

The key financial thresholds in England are:

• Above £23,250 in assessable capital: You are a “self-funder” and must pay the full cost of your care.
• Between £14,250 and £23,250: You receive partial local authority support, but pay a “tariff income” contribution of £1 per week for every £250 (or part thereof) above £14,250.
• Below £14,250: The local authority funds your care (though you still contribute most of your income, keeping only a Personal Expenses Allowance).

Understanding the Means Test

The means test (officially the “financial assessment”) is the process by which the local authority determines how much the care home resident must contribute towards their fees. It examines:

Key factors in the means test include:

• Capital: Savings, investments, stocks and shares, bonds, and any property (subject to disregards)
• Income: State pension, occupational pensions, private pensions, annuity income, benefits such as Attendance Allowance
• Property: The value of any property the resident has a beneficial interest in — although specific disregards apply (see below)
• Notional capital: Assets the person has deliberately deprived themselves of to reduce their assessable capital — the local authority can treat these as if the person still owns them

It’s important to understand that the means test assesses the individual entering care, not the couple as a unit. The remaining spouse’s own income and savings are not assessed. However, where assets are jointly held, the resident’s share is assessed.

Property Value and Care Fees

The value of the couple’s property is often the largest single asset, and it’s the one that causes the most anxiety. With the average home in England now worth around £290,000, the stakes could hardly be higher. Here’s how the rules work in England:

The property IS disregarded (not counted) if any of the following people still live there:

• The resident’s spouse or civil partner
• A partner (including someone who was living with the resident as if they were a spouse)
• A close relative who is aged 60 or over
• A close relative who is incapacitated
• A child of the resident who is under 18

The local authority also has discretion to disregard the property in other circumstances — for example, if a carer who gave up their own home to care for the resident is still living there.

The property is NOT disregarded once the qualifying person no longer lives there — for instance, if the remaining spouse also enters care or passes away. At that point, the full value of the resident’s share of the property becomes assessable, and this is where families often face the devastating reality of having to sell the home to fund care.

Understanding these financial rules is essential, but understanding them alone isn’t enough — you need to act on them while you still have the opportunity. The earlier you plan, the more options you have.

Protection of Your Home

Protecting the family home is the top priority for most couples facing care home admissions. There are several mechanisms built into the system to help — but they are temporary measures, not permanent solutions. For lasting protection, you need to plan proactively with tools like lifetime trusts and proper will structures.

The 12-Week Property Disregard

If the property would be included in the means test (for example, because no qualifying person lives there), there is a temporary 12-week disregard. During the first 12 weeks after the person enters permanent residential care, the value of their property interest is disregarded. This gives families a short breathing space to make arrangements — but it is just that: a breathing space, not a solution.

Key Points about the 12-Week Property Disregard:

• It only applies if the person is entering a care home for the first time as a permanent resident (not temporary or respite care).
• It lasts for just 12 weeks from the date of admission — after that, the property value is fully assessable.
• During the 12 weeks, the local authority will fund care as if the property didn’t exist, but this is not a gift — the resident is still expected to contribute their income and other assessable capital.
• The 12-week period is designed to give families time to arrange a Deferred Payment Agreement or make other financial arrangements — not as permanent protection.

Deferred Payment Agreements

A Deferred Payment Agreement (DPA) is a scheme that prevents families from being forced into a rushed property sale. Under a DPA, the local authority effectively loans the care fees to the resident, secured against the property. The loan — plus any interest and administrative charges — is repaid when the property is eventually sold or from the person’s estate after death.

How Deferred Payment Agreements Work:

Important: A DPA doesn’t protect your home — it merely delays the point at which you lose it. The property is still ultimately being used to pay for care. The debt accumulates, and over several years of care at £1,200–£1,500 per week, it can consume most or all of the property’s value. A DPA is a useful short-term mechanism, but it is not a substitute for proper advance planning.

Understanding these protections is an important first step, but they are reactive measures — they deal with the situation after it’s already happened. The truly effective approach is proactive: putting the right legal arrangements in place years before care is needed. A Family Home Protection Trust, for example, can place the property outside of the means test altogether, while still allowing the couple to live in it. This is a lifetime trust — a legal arrangement where legal ownership of the property is transferred to trustees, while the couple retains the right to occupy the home. The key is to act while you’re both healthy and there is no foreseeable need for care — because once care is on the horizon, the local authority can challenge any transfers as a deliberate deprivation of assets.

At MP Estate Planning, we document a minimum of nine legitimate reasons for establishing a trust, none of which mention care fees. Care fee protection is an ancillary benefit of proper estate planning — not the primary purpose. This approach is robust precisely because the trust is established for genuine, documented reasons such as protecting assets from divorce, preventing sideways disinheritance, bypassing probate delays, and preserving wealth for future generations.

Rights of the Spouse Remaining at Home

Understanding the rights of the spouse who remains at home is crucial when the other spouse requires care home services. The law in England and Wales provides important protections, but they are not unlimited — and some of the most significant risks emerge not immediately, but further down the line.

Staying in the House

The most important protection for the remaining spouse is the mandatory property disregard. As long as the spouse continues to live in the family home, its value is not included in the care home resident’s financial assessment. This means the local authority cannot require the property to be sold to fund the other spouse’s care.

However, the level of protection depends on the ownership structure. For more information on protecting your assets, you can visit our guide on care home fees and property.

Access to Joint Finances

The spouse remaining at home needs to understand their access to joint finances. While only the care home resident’s resources are assessed in the means test, the practical impact on the household can still be significant.

Here are key points to consider regarding access to joint finances:

• Joint Bank Accounts: Both spouses retain legal access to joint bank accounts. The local authority should assess only 50% of the joint account balance as belonging to the care home resident (unless there’s evidence of a different split). However, if the resident’s share of savings exceeds £23,250, they will be assessed as a self-funder.
• Income: The care home resident’s income (state pension, occupational pension, etc.) will be assessed, and most of it will go towards care fees — leaving only the Personal Expenses Allowance. The remaining spouse’s income is not assessed. However, if the couple previously relied on both incomes to maintain the household, the remaining spouse may face a significant shortfall.
• Attendance Allowance: If the person in care was receiving Attendance Allowance, this usually stops after 28 days in a care home funded or partly funded by the local authority. If the resident is a self-funder, Attendance Allowance can continue. This distinction matters — it’s worth checking the position carefully, as it can make a real difference to household income.

It’s essential for couples to understand these implications and plan effectively. Where possible, having a Property and Financial Affairs LPA in place allows the remaining spouse to manage both their own and the care home resident’s financial affairs efficiently, without needing to apply to the Court of Protection.

Selling the Property: Pros and Cons

Selling the family home when one spouse requires care is a decision that carries enormous financial and emotional weight. It’s not a decision anyone should make in a hurry, and in many cases, it can be avoided entirely with the right planning. Let’s examine when selling might be considered, and what the alternatives are.

Pros of Selling:

• Releasing capital: Selling releases the equity in the property, which can be used to fund care fees, purchase a smaller property, or provide financial security for the remaining spouse.
• Eliminating ongoing costs: A large family home carries maintenance costs, council tax, insurance, and utility bills that may be burdensome for one person.
• Simplifying the situation: For some families, selling removes uncertainty and provides a clean financial position to work from.

Cons of Selling:

• Emotional upheaval: Leaving the family home — often of decades — can be deeply distressing for the remaining spouse, especially during an already difficult time.
• Increasing assessable capital: Once the property is sold, the entire proceeds become assessable capital. If the remaining spouse later needs care, the cash from the sale will be counted in their means test — whereas the property might have been disregarded while they lived in it.
• Lost growth: Property values in England have historically risen over the long term. Selling may mean missing out on future appreciation. The average home in England is now worth around £290,000 — a figure that has increased substantially over recent decades.
• Care fees consume capital quickly: At £1,200–£1,500 per week, care fees can consume the sale proceeds at a rate of £60,000–£78,000 per year. A property worth £290,000 could be entirely consumed in four to five years of care.

When to Consider Selling

Selling may be appropriate if:

• Both spouses are entering care and neither will return to the property.
• The property is very large, very expensive to maintain, and the remaining spouse would be better suited to a smaller, more manageable home.
• There are no other options for funding care (though this should be verified — a Deferred Payment Agreement may provide an alternative).
• The remaining spouse has a strong personal desire to move and is not being pressured into a decision.

Impact on Means Test and Fees

If you sell the home, the financial impact is immediate and significant:

1. The sale proceeds become assessable capital. If the resident’s share exceeds £23,250, they are a self-funder and will pay the full cost of care.
2. The property disregard no longer applies because there is no property — only cash. Cash cannot be disregarded in the same way.
3. If the remaining spouse later needs care, the capital from the sale is assessed in their means test too. By selling, you may have converted a disregarded asset (the home you live in) into an assessable asset (cash in the bank).

This is precisely why proper advance planning — including the use of lifetime trusts, tenants in common structures, and protective will trusts — is so important. These tools can protect the property without selling it, keeping the family home in the family while still complying with the law. The cost of setting up a trust — typically from £850 for straightforward arrangements — is tiny compared to the cost of care fees, which can consume an entire property’s value in just a few years. When you compare a one-off trust fee to care costs of £1,200–£1,500 per week, it’s one of the most cost-effective forms of protection available.

Options for Future Care

When considering care options for a spouse, it’s essential to explore all available choices. The right decision depends on the level of care required, the couple’s financial circumstances, and their personal preferences. Making this assessment early — ideally before a crisis — gives you far more options.

Home Care Services vs. Care Homes

Home care (also called domiciliary care) allows individuals to receive support in their own home. Care workers visit at scheduled times to help with personal care, medication, meals, and household tasks. This option is often preferred by couples who wish to remain together.

Care homes, on the other hand, provide 24-hour residential care with professional staff on site at all times. They offer a structured environment with meals, activities, and social interaction — which can be particularly beneficial for people with dementia who need constant supervision.

Comparison of Home Care and Care Homes:

Shared Care Arrangements

Shared care arrangements involve splitting caring responsibilities between family members, professional carers, and sometimes the NHS. For example, the remaining spouse might provide companionship and basic support during the day, while professional carers handle more complex personal care tasks. This can work well for moderate care needs and helps maintain the couple’s relationship and daily routine.

Shared care can also include NHS Continuing Healthcare (CHC) — a package of care that is fully funded by the NHS for people with a “primary health need.” If your spouse qualifies for CHC, care is free, whether it’s provided at home or in a care home. CHC assessments are often not offered proactively by local authorities or NHS staff, so it’s worth specifically requesting one. Eligibility is based on the nature, complexity, intensity, and unpredictability of care needs — not on the specific diagnosis. Many families miss out on CHC funding simply because they don’t know to ask for it.

Ultimately, the choice between home care, residential care, and shared arrangements depends on the specific needs of the spouse requiring care, the health and capability of the remaining spouse, and the financial circumstances of the family.

Whatever care option you choose, it’s crucial to have the right legal documents in place — particularly Lasting Powers of Attorney for both property and financial affairs and health and welfare — and to have considered the long-term implications for your home and inheritance.

When to Seek Professional Advice

Seeking the right professional advice — from the right specialist — is perhaps the single most important step you can take. Care fee planning, trust law, and inheritance tax planning are specialist areas that sit at the intersection of multiple disciplines. Many families benefit from working with a dedicated estate planner in addition to their solicitor, ensuring that every aspect of their situation is thoroughly addressed.

Role of Solicitors and Specialists in Care Home Matters

Working with your solicitor alongside a specialist in care fee planning and trust law can help you address:

• Setting up Lasting Powers of Attorney (LPA) for both property and financial affairs and health and welfare — ideally for both spouses, while both still have full mental capacity.
• Severing the joint tenancy and converting to tenants in common, combined with appropriate will trusts, to protect at least 50% of the property from care fee assessment.
• Establishing a lifetime trust (such as a Family Home Protection Trust) to place the property outside of the means test entirely — provided this is done well in advance of any foreseeable need for care. A trust is not a separate legal entity but a legal arrangement where legal ownership is held by trustees for the benefit of named beneficiaries. The trustees are the legal owners, not the trust itself — this is a fundamental principle of English trust law, which was invented over 800 years ago.
• Advising on the deprivation of assets rules — ensuring that any planning is carried out for legitimate, documented reasons and cannot be successfully challenged by the local authority. At MP Estate Planning, we document a minimum of nine legitimate purposes for every trust we establish.
• Challenging local authority decisions — if the local authority is incorrectly assessing assets, refusing to apply the mandatory property disregard, or wrongly alleging deprivation of assets.

Speaking to Financial Advisers

A financial adviser who specialises in later-life planning can complement the legal advice by helping with:

1. Assessing your overall financial position — income, savings, pensions, investments, and property — to determine the best approach for funding care while preserving assets for the remaining spouse and family.
2. Care fee annuities: These are specialist financial products (sometimes called “immediate needs annuities”) that convert a lump sum into a guaranteed income for life to pay care fees. They can provide certainty and protect against the risk of living longer than expected in care.
3. Investment planning: If a property is sold, advising on how to invest the proceeds tax-efficiently to provide income for the remaining spouse while managing the capital for potential future care needs.
4. Benefits entitlement: Ensuring both spouses are claiming everything they’re entitled to — including Attendance Allowance (for the person needing care, if they’re a self-funder), Pension Credit, Council Tax reductions, and any NHS Continuing Healthcare funding.

The key takeaway is this:

• Don’t wait until a crisis to seek advice — plan while you’re both healthy.
• This is an area where specialist knowledge makes a real difference — care fee planning and trust law require dedicated expertise, and many families benefit from working with a specialist estate planner alongside their solicitor.
• When you compare the cost of proper advice to the potential costs of care fees or family disputes, it’s one of the most cost-effective forms of protection available. A trust from £850 costs the equivalent of roughly one week of care home fees. Without it, your family could lose an asset worth £290,000 or more.

Conclusion: Making the Best Decision for Your Family

When a spouse needs to enter a care home, the question of what happens to the family home is understandably one of the most pressing concerns. The good news is that while a spouse remains living in the property, it is disregarded in the means test. The challenge lies in what happens next — when the remaining spouse also needs care, or after they pass away.

Assessing Your Circumstances

Every family’s situation is different, and there is no one-size-fits-all answer. The right approach depends on how you own your property, the total value of your assets, both spouses’ health, your family structure, and your goals for inheritance. Start by understanding where you stand: how is your property held? Do you both have LPAs in place? Have you made wills — and do those wills include protective trusts? If the answer to any of these is “no” or “I’m not sure,” that’s your starting point.

Planning for the Future

The families who protect their homes are the ones who plan ahead — years before care is needed, not weeks. As Mike Pugh says: “Plan, don’t panic.” The tools are well established in English law: severing the joint tenancy, holding as tenants in common, protective will trusts, lifetime trusts such as the Family Home Protection Trust, and Lasting Powers of Attorney. England invented trust law over 800 years ago — these are not loopholes or schemes. They are legitimate, time-tested legal arrangements designed to protect families and their assets.

Not losing the family money provides the greatest peace of mind above all else. When you compare the cost of setting up proper protection — from £850 — against the cost of care at £1,200–£1,500 per week, the decision becomes clear. The question isn’t whether you can afford to plan. It’s whether you can afford not to. Keeping families wealthy strengthens the country as a whole, and trusts are not just for the rich — they’re for the smart. We recommend contacting a specialist in care fee planning and asset protection as early as possible to discuss your options.