Will your Family Trust do what you expect it to do?
Since the Government made the promise to reform the funding of elderly care in July 2019, families have paid out in excess of £14 billion or £21 million every single day. This is not surprising when you consider that the average cost of a care home is £6,000 per month.
When someone is taken into a care home, they are assessed financially to see if they are to be ‘self-funded’ or paid for by the Local Authority. Basically if you have assets in excess of more than £23,250 you will be self funding and if the value of your estate is in your property, then that will ultimately have to be sold to finance your care. If you try to pass the ownership of your property to someone else or perhaps transfer it into a ‘Family Trust’, that is classed as deprivation of assets and is not allowed. The authorities will ‘look through’ the gift in order to gain access to the asset.
Many people become confused with the seven year rule believing that if you give away your assets and survive for seven years, they are safe. This does not apply to nursing home fees and is only relevant, under certain circumstances, in relation to inheritance tax.
Unfortunately we are consulted by many elderly clients who have been persuaded to transfer their homes into trust during their lifetime. Often the company dealing with this for them have named themselves as trustees which can cause huge problems when trying to either dissolve the trust or sell the property. Effectively by naming the personnel of these companies as trustees, you are losing control of your own home and the promise made that the action will safeguard your property from assessment for nursing home fees is incorrect. If you remove assets from your estate, that is undoubtedly a deprivation of assets. To make matters worse some companies charge very high fees for setting up these trusts and it can also cost just as much to ‘unpick’ them.
Sadly very little can be done at the current time to preserve your estate for future generations unless you are married, under which circumstances it may be possible to safeguard 50% of your joint estates but only after the death of one of you.
This is a subject that is important to the majority of people over ‘a certain age’ and if you would like further information on asset protection please do not hesitate to contact us.< < back to latest news
Terry Jones Solicitors is a trading style of MLL Ltd. Registered as a limited company in England and Wales, registration number 05907992. Company registered address is at Sale Point, 126-150 Washway Road, Sale, Manchester, M33 6AG. Authorised and regulated by the Solicitors Regulation Authority (SRA ID 446632). VAT registration number 742326449.
Names of Directors are available upon request.
MLL Ltd is part of the Metamorph Group. See here for the Groups full legal and regulatory information.
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