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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 34105
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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is a Family Trust - to guard against hefty care costs should

Resolved Question:

is a Family Trust - to guard against hefty care costs should this arise - a good idea?
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello,

What has the financial adviser advised you?
Expert:  Clare replied 3 years ago.
Hi
Thank you for your question.
My name is XXXXX XXXXX I will do my best to help you
The simple (but unhelpful) answer is "it depends"
If there are very substantial family assets then possibly
If there are simply modest assets which comprise for the most part of your home then it is less likely to be effective or worth the expense especially in an area where there is a great deal of on going change
This article
http://www.telegraph.co.uk/finance/personalfinance/insurance/longtermcare/10117822/Warning-over-care-home-trust-schemes-that-promise-to-protect-your-property.html
gives a very clear summary of the pitfalls
Please ask if you need further details
Clare
Customer: replied 3 years ago.

Its a guy called Clive Langley who works for PSA Financial Services who in turn work wih Angel & Co solicitors to set up the family trusts and tenants in common wills. I met Clive through the Civil Service Pensioners Association (CSPA) and we don't have a problem with the advice or with Clive but just wanted a second opinion as it is a big decision.


We currently have set up a tenants in common Will, but we have significant savings in ISAs and bank / savings accounts all of which are liable to be accessed as part of our assets should costs for the care of one or both of us arise in the future.


It has been suggested we set up:


1. A Family Trust for the house - which we own outright, and


2. Shift some of our assets into Investment Bonds which are not able to be accessed by LAs for care costs usually.


 


Finally, we estimate that our estate overall is beneath the threshold for which Inheritance Tax applies.


 


Hope this helps!


 


David & Marion Fisher

Expert:  Clare replied 3 years ago.
Hi
How much is the house worth?
Clare
Customer: replied 3 years ago.

Not more than £250k at this time based on house sales in the area.

Expert:  UKSolicitorJA replied 3 years ago.
Thank you.

To answer your original question, it may be a good idea if you do it early enough e.g. if you go into care within 6 months of setting up the family trust, it will be immediately seen as a deliberate deprivation of assets.

In your case, the primary intention behind setting up the trust is to avoid care home fees and the local authority may (or may not) treat the trust as a deliberate deprivation of assets and treat the property as if you still own it.

If you set up the trust now and go into care say a few years afterwards, there is less likelihood for challengem, although the risk will still be there, especially if you continue to live in the property after the trust is set up.

You also need to factor in the costs of setting up the trust as well as there is not much point in setting it up and incurring huge expenses if the local authority will ignore it when assessing means testes benefits.

This brochure will help you understand the matter better:

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

Hope this helps
Expert:  Clare replied 3 years ago.
HI
From what you have said it seems unlikely that you assets justify the expense involved
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 34105
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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