Care & Home Inheritance Plan

Many people dream of passing on their worldly possessions to their family, including their home.

Unfortunately, for lots of older people, their wealth is locked up in the property they own.

When the time comes that they need care, they often need to sell their home to fund their long-term care costs. Meaning very little, if anything is left in the way of inheritance for their intended beneficiaries.

The solution

The Care & Home Inheritance Plan (CHIP®) has been designed to ensure that the monetary value of the home is left untouched and can be left to your chosen beneficiaries.

The CHIP® pays the agreed contribution to the care home fees in exchange for acquiring a lease on the freehold of the property. The maintenance & rental of the property is managed during the lease term by the planned provider in order for the CHIP® to be repaid. Once the agreed lease break fee has been repaid in full, the property can then be handed back to the beneficiaries.

The CHIP® gives the individual the comfort that the agreed contribution to care will be paid directly to the care home whilst still allowing them to leave their home to their nearest and dearest upon their passing.

How it works

The CHIP® pays out 3 years’ worth of agreed contribution to care fees directly to the care home provider. The product includes safeguards aimed at securing the same care contribution (by way of a discretionary grant) beyond 3 years with no additional costs incurred by the customer.

The property lease is transferred to the planned provider once the client has moved into care; any essential works needed to make the property lettable are undertaken and the house is rented out. The monthly rental yield then chips away at the lease break fee until it is fully repaid.

The ongoing management of the property, including its tenants and insurance costs, are met by the product provider.

Once the lease break fee has been cleared the home can then be transferred back to the estate beneficiaries.

Eligibility requirements

• The individual who owns the property has Mental Capacity, or there is a Power of Attorney (PoA) in place
• The individual is assessed as needing to go into a residential care home
• The property is not the permanent residence of a spouse, relative, dependent or other

Frequently Asked Questions

How long does it take to repay the CHIP?

Typically it takes between 10 - 15 years for the CHIP® to be repaid in full.

What happens if we need care for more than 3 years?

One of the unique features of the CHIP® is that it can pay the agreed care contribution by way of discretionary grant, beyond 3 years for as long as the care is needed without increasing the lease break fee.

What if we need less than 3 years’ worth of care fees?

The CHIP® balance of 3 years’ worth of care fees would still stand; as would the lease break terms agreed when the CHIP® was taken out.

What happens if the cost of care increases?

The CHIP® continues to pay the agreed contribution to care fees. Notional inflation costs are a feature of the CHIP®. However if the client's care needs and costs increase the client will need to pay this additional cost themselves.

Can we move care home providers?

Yes, and the agreed contribution to care costs will continue to be paid to the new provider.

What if we wanted to take back the property sooner?

You are very welcome to take back the property at any point with 6 months’ notice.

There is a lease-break fee payable; this will be fixed and agreed with the customer before any ease commitment is entered into and will not be subject to any further alteration.

What happens if the property is empty and without a tenant? Does this increase the time it takes to pay back the CHIP?

Before the CHIP® is taken out you will be presented with a full schedule outlining the repayment lease break terms and the time it will take to repay the CHIP®.

If for any reason the property is vacant during the term, the product provider will incur the costs. It will not increase the agreed lease break terms.