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When someone dies in a care home, the executor must deal with any outstanding fees, consider whether the local authority has a potential deprivation of assets claim against the estate, and confirm whether NHS Continuing Healthcare should have applied. Getting this wrong can expose the estate — and even individual beneficiaries — to unexpected liability.
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Care home fees are an ordinary debt of the deceased's estate. If there are unpaid fees at the time of death, the care home or local authority can pursue that debt through the estate before any beneficiary receives their inheritance. The executor is responsible for identifying and settling all debts — see our estate administration checklist for the full sequence.
Debts are paid in a strict order of priority in England and Wales. Secured debts (such as a mortgage) come first, then funeral expenses, then administration costs, then unsecured debts including care fees. Only after all debts are cleared does anything remain for beneficiaries.
Executors should contact the care home within days of death to obtain a final statement. It is common for fees to continue accruing for a short period after death while personal belongings are collected and the room is vacated — typically a week or more depending on the contract.
Deprivation of assets occurs when a person deliberately reduces their capital or income in order to avoid paying — or to reduce — their care home fees. Under the Care Act 2014 and its statutory guidance, a local authority can treat a person as still possessing assets that they have given away if the authority believes that deliberate deprivation was a "significant motivation" for the transfer.
Importantly, there is no fixed time limit. While some people believe there is a "6-month rule" or a "7-year rule" (the latter is an inheritance tax concept — see our 7-year gifting rule guide), the Care Act guidance says the local authority must consider all the circumstances, including when the disposal took place, whether the person could reasonably have anticipated needing care at that time, and what the person's state of health was.
A gift made 10 or 15 years before entering care can still be challenged if the person was already in ill health and care was a foreseeable possibility. By contrast, a gift made in good health many years before any care need arose is far harder for a council to challenge.
The local authority may assess deprivation of assets for:
The local authority looks at whether the person had care and support needs (or could reasonably have foreseen having them) and whether the purpose was to reduce care fees.
When someone dies in a care home with outstanding fees, the local authority may pursue a "notional capital" claim — treating the deceased as if they still owned assets that were given away. This affects the estate calculation and can mean that either:
Third-party recovery is less common but legally possible. Local authorities can bring civil proceedings against the recipient of a deliberate deprivation transfer. This is more likely where a property was transferred and is still occupied by or held by the recipient.
Executors should be transparent with beneficiaries about any potential deprivation of assets risk before distributing the estate. Distributing assets when there is a known creditor claim can make the executor personally liable for that debt.
In England, local authority-funded residential care is means-tested. The capital thresholds in 2025–26 are:
| Capital level | Consequence |
|---|---|
| Above £23,250 | Self-funder — pays full fees |
| £14,250 – £23,250 | Partial local authority contribution |
| Below £14,250 | Local authority pays; personal allowance only retained |
The deceased's main home is not counted in the capital assessment if a spouse, civil partner, or dependent relative is still living there. However, it may be counted after death if it forms part of the estate — which is relevant to deprivation of assets analysis.
NHS Continuing Healthcare (CHC) is fully funded by the NHS and is available to people with a "primary health need". If someone had a primary health need throughout (or part of) their time in the care home, the NHS — not the local authority — should have been paying. The individual should not have been self-funding or means-tested.
This matters to executors and families for two reasons:
Pursuing a retrospective CHC claim is a specialist area and usually requires the help of a healthcare solicitor or a specialist CHC advocacy service.
If you are administering the estate of someone who died in a care home, work through these steps in order:
For the complete probate process, see our complete UK probate guide 2026.
If the deceased owned a property that was not occupied by a qualifying relative, it will typically have been included in the means test — possibly deferred under the Deferred Payment Agreement (DPA) scheme. Under a DPA, the local authority lends the person the cost of care, secured against the property as a charge (similar to a second mortgage).
After death, the DPA debt plus interest becomes due from the estate. The executor must pay off this charge from the sale proceeds of the property before distributing the remainder. The local authority will provide a redemption figure.
This is separate from — but can interact with — a deprivation of assets analysis. If the property was transferred to children while the DPA was in place, that transfer is almost certain to be challenged.
For guidance on dealing with property in an estate generally, see our guide on selling a probate property.
Care fees are just one of several debts an executor may need to deal with. Our debts after death guide covers the full priority order for settling liabilities. The key principle is that the estate must be solvent before any beneficiary receives their share — and if it is not solvent, the rules on insolvent estates apply.
For the broader context of estate administration, use our estate administration checklist and the probate checklist.
If assets were given away and those gifts are treated as "notional capital" by the local authority, they may also be relevant to the inheritance tax calculation — specifically as potentially exempt transfers (PETs) that failed because the donor died within 7 years. Read more in our inheritance tax UK 2026–27 guide.
Note that the IHT 7-year rule and the care fees deprivation test are entirely separate legal regimes. A gift that is outside the IHT 7-year window can still be challenged for care fees purposes, and vice versa.
If a local authority makes a deprivation of assets finding and seeks to recover money from the estate, the executor (or beneficiaries) have the right to challenge it. The process involves:
Specialist care funding solicitors deal with these disputes routinely and can assess whether the local authority's position is sustainable.
For guidance on starting estate administration, see our what to do when someone dies guide, and use our applying for probate guide once you are ready for the grant. If you are unsure whether to use a solicitor for probate, our comparison guide may help. Farra can also help you navigate the estate administration process — get started here.
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