Asset protection trusts re care home fees - what do we think?

[T4tomo]

i.e. the concept of an ageing widowed parent putting their home into a trust with their children to attempt to protect it from being seized / sold to fund care home fees by local authority.

Does it work, does the local authority drive straight thru it, does it cause more problems than it solves?

Any thoughts or experience?

 

[Dogtrousers]

My experience - we sold my mum's house and put her money into a managed pot to fund her care in later life. This enabled wider choice of homes and hopefully better care in her final years.

We'd discussed this with my dad when he was still around and his plan was to concentrate on her wellbeing and care. Stinting on quality of care in order to cling on to property was not in his plan.

 

[fossyant]

I'm afraid you can't go 'protecting it' - the council's aren't daft. Your choices are selling and using the cash to pay for care, or working with the LA in that they place a charge upon the property, and at the point the property sells, then the council take their care fees.

We did this with MIL - most of the value of the property went in care home fees for the three years she was in a nursing home. We sold the property about six months after she died - the house was empty (although maintained) for three years.

You have money/property over £23k or so, you pay for your care.

 

[Arjimlad]

i.e. the concept of an ageing widowed parent putting their home into a trust with their children to attempt to protect it from being seized / sold to fund care home fees by local authority.

Does it work, does the local authority drive straight thru it, does it cause more problems than it solves?

Any thoughts or experience?

These are usually promoted by unqualified & unregulated will-writers - but as soon as there is a sniff of it being to "avoid liability for care costs" it is void. So the local authority only has to produce the adverts from the will-writers, if that. I have seen many of these set up, people being drawn in by the offer of a £99 will but then sold one of these trusts at a cost of thousands, and yet the trust is not properly set up, or is useless, or the property gets registered incorrectly etc etc. The will writers by then sometimes have either closed down or stopped answering the client's calls/letters whilst trousering £5,000 of costs for doing nothing useful at all & creating a lot of issues/complexity/cost which the donor/their family never understood properly.

Also, trusts have to be separately registered, taxed (capital gains tax arises!), administered and then this creates its own set of problems.

There are also anti-avoidance rules which stop giving something away into a trust when the donor retains the benefit of it ... i.e. put home into a trust, continue to occupy it paying no or low rent to the trust.

Sometimes people will split ownership of a jointly owned property from joint tenants into tenants in common in equal shares, which with a Will can preserve the half-share of the first of the owners to die by gifting that to the beneficiaries with a life interest to the surviving spouse. Take professional advice from a regulated insured accountable specialist lawyer who can be found via https://www.lifetimelawyers.org.uk/

https://wards.uk.com/news/asset-protection-trusts/

 

[Marchrider]

register it as a farm and they won't touch it - parallel universe time

 

[Drago]

Im away ahead of this one, made my arrangements a year go when Imwas 55 and Mrs D 45.

I spent my career locking up largly the same sheetbags week after week, year after year. They've never contributed a penny and they'll get this for free like they do everything else.

Well, I'm not being bent over simply because I worked and l was prudent with my planning. Taken care of this hopefully decades in advance, separating the lot neatly in time, space and law from the avarice of any such organisation wanting to make me spend it of stuff they give to others for free.

 

[gbb]

A friend of my wife's did it and while I didn't really absorb any details...I think it's time dependant. I vaguely seem to remember the trust had to be set up 6 years before death for it to stick.

I learned to my regret how different the quality of care can be..and that's greatly dependant on whether it's self funded or local authority funded.
My mum (not a home owner but she had significant savings) booked herself into a private place (they advertise on TV) locally, £1500 a week and thoroughly enjoyed it (although nice as it was, the reality didn't match the glitz of the advert...but still very nice)
Then she started to worry about her savings disappearing and virtually demanded she come home.
We quickly realised, once home, we had become her carers and she was completely incontinent, ruining bedding and her chair , it quickly became a bit of a nightmare.
We asked the LA for help finding a place now her savings were quite severely diminished...and she ended up in another LA fundednplace...and it was a whole different world . The staff were really good but the facilities were not and the smell of incontinence was strong.

We/she had dug ourselves a pit...she passed away shortly after but she should really have enjoyed her last days in comfort and nice surroundings.
I wouldnt wish LA funded care on anyone if her experience is typical. It may be once she ran out of money in the nicenplace..she'd have been shipped out anyway, we never got to ask that question.

Lots of regrets and sadness over how it panned out.

But, be aware, as someone gets into their 90s, particually if theyve lost mobility, become chairbound and incontinent to boot, their care becomes almost full time, you can't do as we were, popping in once or twice a day, doing the laundry, cleaning, cooking, it's exhausting and all encompassing. I guess if you lived in it's do-able but don't underestimate how much care an 80 or 90 year old needs (unless you're very lucky)

 

[Marchrider]

We have recently being considering a care home for my MIL, the money involved is astronomical, £2,000 to £2,500 per week. and from what I can gather after to talking to many people locally there is no difference in the care the council pay for and the ones you pay for yourself.

the care you receive will be all down to the attitude of the carers (some are wonderful, some less so) and have nothing to do with how much money you are paying.

 

[gbb]

Another thought...
Ok, so you theoretically protect against the loss of assets. Years later, the parent becomes unable to look after themselves...and you or other family members can't become their carer. They're going to need residential care ? How are you going to pay?
You will condemn them to LA funded care...and I refer you to my experience up post.

 

[gbb]

We have recently being considering a care home for my MIL, the money involved is astronomical, £2,000 to £2,500 per week. and from what I can gather after to talking to many people locally there is no difference in the care the council pay for and the ones you pay for yourself.

the care you receive will be all down to the attitude of the carers (some are wonderful, some less so) and have nothing to do with how much money you are paying.

The only way this would be true (with my mothers experience of paying for private care)...is if the private care home took LA funded people and you were lucky enough to benefit from that.
Mums experience of the two was night and day. It's SO different in quality, facilities, care etc etc between private and LA

 

[T4tomo]

Sometimes people will split ownership of a jointly owned property from joint tenants into tenants in common in equal shares, which with a Will can preserve the half-share of the first of the owners to die by gifting that to the beneficiaries with a life interest to the surviving spouse.

Yes half of it is protected anyway as my Dad's share has already been passed down when he died...
the more I look into it I don't the trust is a great idea. Even if it serves its protection purpose, which is a big if, there are tax implications (CGT) to be factored in, and diminished choice over care.

 

[Beebo]

Not to get too political, but this nonsense should have been sorted out ages ago.
A cap of £100k life time contribution would make sense to me. That would stop people trying to avoid paying, knowing that their lability was limited.
My MIL lost everything to care costs. She had just £20k when she died.

 

[Bonefish Blues]

Not to get too political, but this nonsense should have been sorted out ages ago.
A cap of £100k life time contribution would make sense to me. That would stop people trying to avoid paying, knowing that their lability was limited.
My MIL lost everything to care costs. She had just £20k when she died.

Dilnot Commission. Now formally ignored, rather than informally ignored. What was the point.

 

[gbb]

I gather there is another proviso as to whether the LA can use the house funds ...are there any under 18s , it may be under 16s, resident. They cannot make minors effectively homeless was the logic.

Feel free to correct me, pretty sure it used to be a condition in effect but may be wrong

 

[biggs682]

Care homes are expensive we are paying around 5k month for an elderly relative and trust me it's hard work finding a good one