My wife and I are concerned about losing our £250,000 home to fund care costs. Can we sell 49% to the kids for £1?

My wife and I are both 56 and in good health. Our house is worth approximately € 250,000 and mortgage-free.

I wondered if selling 49 percent of the house to my children would be a good way to ensure they get something from the estate in the future.

Assuming that my wife or I will need self-funded care in the future, I look at how I can protect their interests by giving my wife or I only 51 percent of the property value if the house has to be sold to provide care. to finance.

I suspect I would need some form of conveyancing assistance from a lawyer to draw up contracts and sell their share for £1 each. TC via email

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Harvey Dorset from This is Money replies: Many people will need care later in life, and the vast majority of them will have to finance it themselves.

Currently the upper limit for council care funding is just £23,250, meaning if you own property you are almost guaranteed to break this barrier.

To pay for care, you may need to use the value of your home, depending on what other assets you have.

If you or your wife continue to live in the parental home while the other goes into care, the good news is that your home will not be sold to pay for care costs. This is known as an obligatory negation.

However, if this is not the case and only one of you remains in care, the costs of your care can be claimed by the municipality when the house is sold after both of your deaths.

As discussed below, there are several trusts that can help you pass on some of your assets to your children. However, it is essential that these are set up correctly to ensure that you do not end up in legal trouble.

The fact that you are both 56 could help with this. If you ensure that part of the home is placed in trust well before you need care, this means that there is no current expectation that you will need care.

If there is a transfer while you know that you need care, the municipality may consider this deliberate deprivation of assets.

This is Money spoke to two financial advisers to find out what you can do to ensure your children receive an inheritance when they grow up.

Billy Ambler, independent financial planner at Flying Colors, answers: The question you asked may be complex; you will need a competent lawyer who works in this specific area to investigate this for you and advise you on the best way to proceed.

If you were to sell 49 percent of the home to your children, there are quite a few things you need to take into account.

One of these is the issue of selling a property below market value and the possible tax that may arise.

Retaining a benefit from the property and the possibility of having to pay market rent as a result is also a concern.

There may be increases in stamp duty in the future, plus affordability implications for your children on other potential property purchases – all of which needs to be thought through.

However, from a financial planning perspective, there is a simpler solution to protect your children’s interests and ensure that your estate cannot be sold to fund their care later on.

By using a discretionary living trust with a tenant in a joint arrangement, you and your wife would still own the property together, with each of you having a separate share or percentage of ownership.

You retain ownership, so you don’t have to pay rent on the property for the trust to exist.

Assuming that you and your wife each own 50 percent of the property, then upon the first death, 50 percent would pass to your beneficiaries (your children), and the remaining 50 percent would still belong to the surviving spouse.

Due to the legalities surrounding these types of trust structures, the local government would not be able to force the sale of the property to pay for care.

Upon the death of the second tenant in common (the surviving spouse), the full value of the home would then belong to your children within the trust.

This type of trust also sets out how assets will be divided if you both die – whether equally between your children or otherwise. It guarantees that your wishes are carried out and provides clarity for your children.

However, you need to ensure that the trust can be easily dissolved if you both die.

Your children should also be aware of potential Capital Gains Tax (CGT) liabilities if they were to keep the house and then sell it in the future for an amount significantly more than it was worth at your death.

My advice would be to ensure this is drawn up properly, along with an updated will, and this should be done by professionals who are familiar with these types of arrangements.

Kev Burns, chartered financial planner at HFMC Wealth, and @the_moneypt on Instagram, replies: First of all, congratulations on taking the first steps to shape your financial future.

This is often where many people stumble, so it’s encouraging to see you’re thinking ahead.

Step 1: Identify what matters most to you right now about money

Before diving into possible solutions, it’s crucial to ask yourself: What’s the most important thing about money right now?

Does this ensure that you and your partner have sufficient money for any self-financed care?

Or will you leave a meaningful legacy for your children?

Maybe it’s a different priority entirely.

Taking the time to define what is most important will guide all your future financial decisions.

Step 2: Set your goals and prioritize

Once you’ve identified what’s important, the next step is to identify specific goals and prioritize them. This is critical because some priorities may conflict.

For example, if self-funded care takes priority over leaving an inheritance, selling part of your property to your children now may not be the best course of action.

Step 3: Connect monetary values ​​to your goals

Quantifying your goals helps bring clarity and structure to your plan. For example:

If care costs an average of $60,000 per year and you estimate that you will need two to three years of care, you may need about $240,000, adjusted for inflation.

Mapping your current financial situation is essential. If your assets are primarily in real estate, it can be difficult to access these funds when necessary. After all, you can’t just sell a bathroom if you need €60,000.

If your primary asset is your home, these are the most important options to consider:

Sell ​​your property

Selling your house can free up equity, but it also has significant disadvantages:

You may have to move due to ill health.

Costs associated with selling and buying, such as legal fees and moving costs, can add up quickly.

If your children co-own the property, they may face capital gains taxes on their share, which reduces the available equity.

Release of equity (lifetime mortgage)

Equity release allows homeowners over the age of 55 to borrow against their property, deferring repayment until you die or enter long-term care. However:

If your children are legally co-owners of the home and are under 55 years of age, this option is not available.

Under current rules, you only have to fully finance care yourself if your available capital is more than £23,250. This calculation probably takes the value of your home into account.

A real estate trust can secure a portion of your property’s value so that some of it is passed on to your beneficiaries while providing a safety net for healthcare costs.

The most important aspect of financial planning is maintaining flexibility and freedom. Your priorities today may change over time, so it’s critical to avoid decisions that could limit your options in the future.

The cornerstone of a successful financial strategy is a goals-based lifestyle plan, which is reviewed annually to ensure your goals and strategies remain aligned.

A highly qualified financial planner and other professionals can guide you through this process, helping you identify your goals, explore your options, and create a plan that adapts as your circumstances evolve.

Taking this step will ensure that your financial future is secure, flexible, and aligned with your priorities.