property into trust

edgebiker

Not sure if this is the right place for this but i will try.
Mother is 77 this year and has been told by a friend if she puts her property (value about 150,000) into a trust fund for myself and 2 brothers giving us each a 25% share and keeping a 25% share for herself, making us tenants in common, she can avoid the local council selling her property if she should go into care. Her friend has apparantly done this with a will writing company.
AT this moment in time she has all her faculties is reasonable fit and well and coping quite well on her own. Property is paid for and in her sole name.
Hope someone out there has some advice.
Thanks

Dora_the_Explorer_5

I think you would be wise to talk to seek advice or ask her local authority for its policy. They may consider any transfer of part or all of the value of her home as deprivation of assets and should she need care assess her as if she still owned the asset outright.
There are factsheets on this on the Age Concern England website. HTH

Zziggi

Isn't there some tax implications now with these kinds of trusts? Something in the budget last couple of weeks as people were using this method to avoid inheritance tax. Was vaguely listening to a radio programme about it when travelling on saturday....

jenniferpa

I think her friend may well find that her efforts have been pointless. About the only exceptions that LA's allow are if a spouse or a disabled child still lives in the property. Do you not think that if it was that easy, everyone would do it? My point being, really, that you can only be certain that these things will work when they're put to the test, and from everything I can see they won't work.

Jennifer
(Edited because I sounded like I was having a go at the OP, which I didn't intend!)

edgebiker

Thanks for all replies i was under the impression that if 7 years had passed you could claim you had nt passed your assets on to avoid care home fees. But i seem to remember reading somewhere that even that no longer applied.
I think contacting age concern is a good idea Dora i will try that. Thanks again

jenniferpa

The 7 years is for IHT. Even that wouldn't apply as this would count as a gift with reservation, which for the purposes of IHT is no gift at all. Help the Aged also have a lot of info on this.

Jennifer

Somerset

I think they've just changed this trust legislation. Read somewhere a lot of ppl will be re-writing their wills because this will no longer work.

jenniferpa

Whether of not an LA will look at money or property that has been given away has as much to do with intent as anything. If you transferred assets to a child apparently with the sole purpose of avoiding care home fees they would not find it that difficult to work out what was going on, and act accordingly. However, say you were a 65 year old widow in good heath with 1 child who had recently been divorced and had no propect of funding a home with thir own funds and you gave that child £40000 as a deposit on a house, I doubt a court would find that that was intentionally depriving yourself of assets if 10 years on you needed to go into a carehome. The LA might not agree though, so it could come to a legal battle. The relevent phrase here is "intentionally deprive".

I've posted this elsewhere, and I'll say it again: even if the LA was going to fund a care home, it might not necessarily be one that you would want to go into! Dealing with the LA over this may not be such a picnic, either. People always look at this as an either/or situation with no downside, but I don't feel that is necessarily true. While an LA cannot say you have to go to this home rather than another because it's cheaper, they are well within their rights to say here are several homes, choose from one of them. They do not have to fund the home of your choice if it costs more than they normally fund. So, with careful planning you may be able to avoid paying for care home fees, but you also may not like what you get. Have a look at soem care homes in your area - you may be less than delighted.

Jennifer

Dora_the_Explorer_5

edgebiker wrote:

Thanks for all replies i was under the impression that if 7 years had passed you could claim you had nt passed your assets on to avoid care home fees. But i seem to remember reading somewhere that even that no longer applied.
I think contacting age concern is a good idea Dora i will try that. Thanks again

The difficulty is that no-ones good health can be guaranteed for 7 years in any case. Unfortunately strokes stike at any age but frequently with age.
As Jennifer has pointed out, care home choices are limited if the LA is funding part or all of the cost. The trend now is to either intensively supporting older people in their own home or offering them a place in extra care supported housing. It's well understood that a place in a care home is not the most appropriate solution for a great many older people and the vast majority of care homes are outside NHS control, are run for profit, an have the potential to be financially abusive and neglectful.

Prudent

I recently read the figures for the number of people that do actually go into care homes. I wish I could remember where because I am sure it was online. The figure was surprisingly low. Your mother may never need a care home - as Dora says there is a shift to support people more at home.

edgebiker

Thanks all for replies.
Dora have explored (sorry) age concerns site and downloaded fact sheets which i shall read and pass on to mum.
As prudent says i believe its only 1 in 10 that ever go into a care home.

Thanks