Help needed to understand Property Trust Wills
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It's not only what choices the surviving spouse might have as regards residential care - if they wish to downsize by selling up a larger house they may well find they cannot afford another property with only half the funds to spend.
The number of people requiring residential care is far less than is suggested, and the average care home stay is a little under 3 years.
People have been misled into thinking that they will enter residential care as a given in old age.1 -
Don't take my word for it. Just remember that if it was so easy to avoid care home fees everyone would be doing it! Go and get some paid for professional advice from a trust specialist. It should only cost a couple of hundred pounds and many solicitors offer an initial free half hour consultation.MysteryMan wrote: »Thanks for reply and information. I have to admit I am more confused than when I started!
Do you have experience or examples of where "property Trust Wills" have been overturned/successfully challenged by local authorities when assessing for care fees?1 -
Life interest trusts set up by will are standard
When the trust rules changed in 2006 these rusts were protected
the terms you are looking for are
Immediate post-death interest trusts.
Effectively the assets remain part of the estate of the survivor for tax purposes but are ring fenced from things like care.
There is an issue if the survivor is not a spouse that can benefit from transferable nil rate band other alternatives should be considered if IHT is a risk for th survivor.
If the trust just hold assets that don't generate income like a house the survivor will live in they are easy to administer.0 -
Personally I would avoid doing this because security in old age is a higher priority than passing on the house. Even if I did not feel that way I would still not do it, as it is highly unlikely that I would be in care for long enough to burn through more than 50% of my stupidly priced house.0
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Keep_pedalling wrote: »Personally I would avoid doing this because security in old age is a higher priority than passing on the house. Even if I did not feel that way I would still not do it, as it is highly unlikely that I would be in care for long enough to burn through more than 50% of my stupidly priced house.
The life tenant can retain the same securty as if they owned the place.0 -
getmore4less wrote: »The life tenant can retain the same securty as if they owned the place.
I was not thinking of security in my own home, but security if I had to move into long term care. Under no circumstances do I ever want to become reliant on LA funding.1 -
the fear of care home fees eating up all your assets outweighs the reality
I don't personally know anyone who has needed residential care that's involved the loss of property , my step dad was bed bound for a year before he died with carers coming in twice a day but my mum retained the house and it never entered the point of a charge being put against itEx forum ambassador
Long term forum member0 -
I am no expert on this but I would have thought that children and vulnerable adults that are unable to manage their own affairs need a trust but grown ups - well once past the silly stage of up to about 25 ought to be able to sort out their own finances if left any money.
My husband is always being approached by his accountant to "protect" our assets with some sort of insurance that will take care of inheritance tax but he refuses to even discuss it. He thinks that if anyone ever left him a hefty amount he would gladly pay any tax!!
We have two sons - one of them far more sensible with money than the other but we will leave them with whatever we have not spent and if they waste it so be it. We will not be here to worry about it all.0 -
Mrs_pbradley936 wrote: »I am no expert on this but I would have thought that children and vulnerable adults that are unable to manage their own affairs need a trust but grown ups - well once past the silly stage of up to about 25 ought to be able to sort out their own finances if left any money.
My husband is always being approached by his accountant to "protect" our assets with some sort of insurance that will take care of inheritance tax but he refuses to even discuss it. He thinks that if anyone ever left him a hefty amount he would gladly pay any tax!!
We have two sons - one of them far more sensible with money than the other but we will leave them with whatever we have not spent and if they waste it so be it. We will not be here to worry about it all.
The "some sort of insurance" may well be a very good idea. We have a second death term insurance policy written in trust to our children . This covers the IHT that would be payable on gifts that we have already given to our children should neither of us outlast the 7 year potentially exempt period.0 -
Mrs_pbradley936 wrote: »My husband is always being approached by his accountant to "protect" our assets with some sort of insurance that will take care of inheritance tax but he refuses to even discuss it. He thinks that if anyone ever left him a hefty amount he would gladly pay any tax!!
So presumably he doesn't have any ISAs or pensions as if anyone is lucky enough to have six figures in savings (anything less is probably covered by allowances) they should be glad to pay income and capital gains tax on it...
There can be good reasons not to take out whole of life insurance to cover Inheritance Tax liability but that's not one of them.Browntoa wrote:I don't personally know anyone who has needed residential care that's involved the loss of property , my step dad was bed bound for a year before he died with carers coming in twice a day but my mum retained the house and it never entered the point of a charge being put against it
It's quite common. I know quite a number of people (all widows and widowers) who sold their house in order to move into care. But, you know, that is what you do when you move house, unless you are rich enough to own two. The idea that people should be able to move house while hanging on to the old one and have the taxpayer pay for it is a bizarre political construct.
The crucial thing is that none of the ones I know came anywhere near exhausting the capital from selling their house on care fees. All of them had enough capital after selling the house to have their own choice of home for the rest of their lives (and, far less importantly, leave the rest as an inheritance). No doubt it's happened somewhere but it's rare.0
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