27-05-2025
Can the council make me sell my mother's bungalow to pay for care?
My mother currently is in an elderly mental health ward suffering with depression and anxiety.
Her £150,000 bungalow in Port Talbot has been put into a trust since 2015 with myself as the beneficiary and my mother remaining as a tenant.
Should the need arise, and she needs to go into something like a sheltered housing complex, could the local authority make me sell her bungalow to cover any care and housing costs? S.M, via email
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Harvey Dorset, of This is Money, replies: Care is something that many of us don't consider earlier in life, meaning that if or when this need arises we may not be ready or able to fund it without making financial life altering decisions.
As many as 66 per cent of care seekers are self-funding, according to 2024 data from Just 16 per cent of care seekers were able to access funding from their local authority.
For those who live alone, there is a risk that means testing could see their home's value used to pay for care.
There has been forethought on your mother's part to place her property into trust. However, depending on the circumstances of this, it could still be deemed that the property can be used to fund any care needed.
As discussed below, this largely relates to the decisions made in 2015 and the reasons they were taken.
Yours is a complex issue. This is Money spoke to two financial advisers to find out what your mother needing care might mean for her property held in trust.
Natalie Donnell, independent financial adviser at Flying Colours, replies: I am sorry to hear about your mother's illness. Having looked at your question, I think the key issue as regards the bungalow is intent.
By that, I mean what was the intention from your mother when she placed the property into a trust in 2015?
This is because if your mother were eventually to need full-time care, the local authority would conduct a capital assessment to determine who is responsible for funding the care (i.e. self-funding or funded by the local authority).
When it comes to long term or full-time care, if the value of your mothers' assets is more than £23,250 (in England – it varies in other parts of the UK), she will be responsible for funding her care needs.
This is different from the current situation, where I would think your mother's care, in a mental health ward, is being funded by the NHS.
Intent comes into this because if the local authority deems that the property was put into trust in 2015 to reduce assets and avoid the eventuality of paying for full-time care later down the line, they could consider this this to be a case of 'deliberate asset deprivation'.
That would mean they could treat your mother as still owning the asset (known as notional capital). They could also refuse to fund care (or assess your mother's situation as though she still owned the asset).
In some cases, they could take legal action to challenge the trust. Whether the trust holds under scrutiny depends on several factors such as whether the trust was created at a time when future care needs were foreseeable, and the structure and type of trust (i.e. discretionary, life interest etc.).
Trusts are a notoriously complex area so I would advise you to seek specialist independent advice on the likelihood of the current arrangement falling foul of the 'deliberate asset deprivation' category, and if so, to see whether there is any action you could take to mitigate against this.
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Adam Johnson, director at SJP partner practice New Forest Wealth Management, replies: The first consideration is whether your mother's care will be funded by the NHS (such as through NHS Continuing Healthcare) or subject to means-testing by the local authority.
If her needs are deemed primarily health-related — for example, if she is sectioned under the Mental Health Act or qualifies for NHS Continuing Healthcare — the value of her property will be disregarded entirely, as the NHS covers all associated costs.
If, however, the care is means-tested, the local authority will assess your mother's income, savings, and assets.
If her savings exceed £23,250 and her income is insufficient to cover care costs, her home could be included in the financial assessment, depending on her living arrangements.
Property use and living arrangements
If your mother continues to live in the property or moves into another owned property (such as sheltered accommodation) and receives domiciliary care, the value of her home is typically ignored.
However, if she moves into residential care and no longer lives in the property, the local authority may then consider the value of the home — unless it is exempt for another reason, such as a dependent still living there.
Trust ownership and deprivation of assets
As the home has been placed in trust, the key issue becomes whether your mother has any rights to the capital value.
If the trust structure means she has no such rights — and only a right to reside, with the capital ultimately passing to you — she may no longer be considered to "own" the property for assessment purposes and therefore cannot be made to sell it.
However, this leads to the question of deliberate deprivation of assets. If the local authority believes the home was placed in trust to avoid future care fees, they could treat her as though she still owns it.
Their judgment will centre on why the transfer was made in 2015. Since the arrangement did not benefit inheritance tax planning (due to her continued occupation), they may question what financial objective was being addressed, and whether placing the property in trust was a proportionate response.
There is no statutory time limit on how far back local authorities can look for evidence of deprivation. Although a transfer made 10 years ago may be less likely to be challenged, it cannot be ruled out.
The outcome will ultimately depend on the local authority's interpretation of the facts and the strength of the explanation for the trust. I recommend reviewing the trust documents in detail.
