Deed Of Trust

PEGSTER

My mother has just been transferred to a care home and her home must be sold to pay for the care.
I have been told that if she had made a trust deed the house cannot be sold to pay for her care. I have asked lots of people and it seems that it is not very widely known about. My mum is 87 and was in the Army during the War and worked from 14 to 65 paying all her taxes and nat ins.
This deed of trust, if it is true is kept very quiet.
Can anyone shed some light on this document.
I will go to a Solicitor for more info if I think there is such a thing.

elsien

I don't know an awful lot about this, but I'm fairly sure that if a house is put in someone elses name and the council think it was done purely to avoid paying care home fees, they can still make a charge on the property when it is sold, even if it is several years later.
It's a complex area, and transferring ownership to avoid paying for care isn't as simple as it sounds, so you'd need professional advice. I think the deed of trust can protect children's share of the inheritance, but at some stage part of the proceeds of the sale may have to be used to pay care home fees, even with a deed of trust in place.
I would rather my mother used her assets to pay for the care she needed, than have worry about what cash she was passing down to me - the bottom line is that whether we like it or not, with an increasingly aging population, the state can't afford to pay for everyone's care needs, whether they've paid contributions all their lives, or not.

EdInvestor

Presumably your mother is a widow? A trust arrangement would only have applied if it had been arranged before your father died.It is certainly far too late now.

PEGSTER

Thanks for your point of view.
I will see a solicitor tomorrow.

margaretclare

PEGSTER wrote: »

My mother has just been transferred to a care home and her home must be sold to pay for the care.
I have been told that if she had made a trust deed the house cannot be sold to pay for her care. I have asked lots of people and it seems that it is not very widely known about. My mum is 87 and was in the Army during the War and worked from 14 to 65 paying all her taxes and nat ins.
This deed of trust, if it is true is kept very quiet.
Can anyone shed some light on this document.
I will go to a Solicitor for more info if I think there is such a thing.

I don't know 'if there is such a thing', or not. But you say 'if' she had made a trust deed, therefore you are implying that she did not. So what are you going to see a solicitor about? I believe that - even if such things do exist - they cannot be set up retrospectively.

McKneff

a deed of trust does indeed exist. my husband and i did this last year through out solicitor.
As Margaretclare says, it cannot be set up retrospectively. However, if you do see a solicitor it can give you information about this for yourself/family for the future. We also changed our ownership of the house from
joint tennants to tennants in common so that each of us owned a half of the house instead of us owning all of it
jointly, our solicitor suggested that to us while we were there.

PEGSTER

Thank you anniehanlon, I know it is too late for my mum and I but she has dementia that has come on so suddenly I am wondering about myself and do not want the same thing to happen to me and my children. I have spoken to a Solicitor and am going to do one shortly.
Thanks again, it shows that it is not widely known about as you are the only one who gave me the answer I was looking for.
My mother is so ill now that she can get NHS funding, but it is something for me to use for myself.

bigbloke45

Have you thought about a deed of variation? If your mother has made a will, there maybe something in this. You can normally backdate stuff up to 2 years.

I think you need to get professional help.

My wife and I have been there with all of our parents. I wish you peace of mind, but remember to fight tooth and nail against the authorities; they don't care about you or your mum, so it's not personal. Every time they say "no" challenge it, it's worth it, I promise.

Best of luck.

judy2357

To avoid half the value of the property being used to pay for home fees your parents would have needed to make Wills leaving half the property to each other and half the property to the children or whoever. They would have also needed to sign a Deed of Severance ie severing the joint tenancy thus changing the deeds from joint tenancy to tenants in common. This would have the effect that when the first person died half the house would belong to the survivor to live there until death or go into a home and the other half to the children, thus the childrens half would not have to be used to pay for the fees.

judy2357

bigbloke45 wrote: »

Have you thought about a deed of variation? If your mother has made a will, there maybe something in this. You can normally backdate stuff up to 2 years.

I think you need to get professional help.

My wife and I have been there with all of our parents. I wish you peace of mind, but remember to fight tooth and nail against the authorities; they don't care about you or your mum, so it's not personal. Every time they say "no" challenge it, it's worth it, I promise.

Best of luck.

I may be wrong but I think a Deed of Variation varies a Will after the death of the person.

localhero

judy2357 wrote:

I may be wrong but I think a Deed of Variation varies a Will after the death of the person.

No, you are quite correct.

judy2357 wrote:

To avoid half the value of the property being used to pay for home fees your parents would have needed to make Wills leaving half the property to each other and half the property to the children or whoever. They would have also needed to sign a Deed of Severance ie severing the joint tenancy thus changing the deeds from joint tenancy to tenants in common. This would have the effect that when the first person died half the house would belong to the survivor to live there until death or go into a home and the other half to the children, thus the childrens half would not have to be used to pay for the fees.

You are on the right lines. To safeguard the surviving spouse from being required to sell the house when the first spouse dies, or indeed if any of the children went bankrupt/got divorced the gift to the children should be postponed until the surviving spouse dies. This would also prevent capital gains tax becoming liable on the increase in the value of the property between first death and second death.

I would like to add that if the surviving spouse required long term care, the local authority would have to assess the market value of the assets of the spouse requiring care, and where a share of the house is owned as tenants in common with others who presumably wouldn't want to sell, then arguably that share is worth nothing or next to nothing.

Couples are therefore able to safeguard their whole house and other assets by some legitimate forward planning by making an up to date Will.