Living with Partner - Buying New House..Advice Please

RobS77

Double post sorry

wise_fool

RobS77 wrote: »

The only context where people would normally I think use an NRB trust is where they are unmarried, unless they want to build in protection I suppose against nursing home fees for surviving spouse.

RobS77 wrote: »

My firm has 4 members of STEP by the way, I agree it is the gold standard.

RobS77 wrote: »

I flatter myself that I am pretty competent having been doing it for seven or eight years.

With such impressive credentials at protecting assets - insofar as safeguarding a house from care fees, could you tell me what proportion of say a couple's house could be safeguarded, say, in the event of the surviving spouse requiring long term care with a will containing a nil rate band discretionary trust?

I would also be interested in your answer to the question put to you by the poster in this thread (post 24): http://forums.moneysavingexpert.com/showthread.html?p=28562411&highlight=#post28562411

RobS77

wise_fool wrote: »

With such impressive credentials at protecting assets - insofar as safeguarding a house from care fees, could you tell me what proportion of say a couple's house could be safeguarded, say, in the event of the surviving spouse requiring long term care with a will containing a nil rate band discretionary trust?

I would also be interested in your answer to the question put to you by the poster in this thread (post 24): http://forums.moneysavingexpert.com/showthread.html?p=28562411&highlight=#post28562411

I wouldn't ordinarily put the property in a NRB trust, I would normally leave it on a discretionary trust referred to above- certainly when we have done it (actually constituting the NRB trust) have been done in to protect cash assets upto the value of the NRB, and the remainder to spouse- when it is the property we tend to leave on a life interest trust or fully discretionary trust as I mentioned in the post before.There is no reason why the half-share couldn't go into the NRB trust I suppose, upto the value of the NRB in the tax year of death, akin to how people did it upto 2007 for tax-planning, as it is fully discretionary anyway.

On a life interest trust once the half-property is conveyed to the Trustees, I am not aware of any instances where the LA have even tried to overturn it: they would have to go to court and try to have the Will overturned I suppose. I am actually just winding up one of these at the mo, where LT has died, and the LA accepted it without question: it seems. I have done a couple of DoV severing the joint tenancy and leaving first spouse to dies assets on a full DT- they were both within the NRB- and suriving spouse made another transfer into a separate DT of their half-share.

The lifetime gift to a discretionary trust is something which I have done a few times, as there are other arguments which you can use in a dispute with the local authority, mainly as asset protection for future generations, and certainly I have never had one overturned in the Midlands where I work (or indeed my firm to my knowledge). They always come with a health warning of course, that the LA will have a go at it, and within a 2 year period of the transaction certainly have a reasonable chance, but after that it becomes more difficult for them. The advice though is that a trust structure certainly offers a greater degree of protection than a straightforward transfer, and there won't be administration fees as the trust is non-income producing, other than the signing of an annual resolution, which the clients normally do themselves. Certainly in the Staffordshire area, once the two year period expires the LA seem to accept it: I would be interested to know if your experience is the same?

wise_fool

RobS77 wrote: »

Fair point- there are lots of solicitors who are not very good, I grant you: high street solicitors have their place, doing conveyancing, but not complicated wills.

My firm has 4 members of STEP by the way, I agree it is the gold standard.

RobS77 wrote: »

I flatter myself that I am pretty competent having been doing it for seven or eight years. Obviously, if they want a Will incorporating a complex tax-planning structure that is a different matter, I quite agree that most solicitors wouldn't be capable of advising on that- or indeed most will-writers I daresay.

You don't seem to have answered my question so I will try and be more specific. Since you have specialised in wills for 8 years, I would like to keep it on this subject rather than life time trusts. I would be interested in how you would deal with a particular scenario. For the benefit of non-legal readers please keep the language simple and jargon free.

Your boss hands you a file note to see a client in hospital who wants a will drawn up. He hasn't got long to live and co-owns a 500k house with his wife. His wife isn't in a position to make a will as she suffers from dementia and is likely to go into care anytime soon.

The file note says that the client has expressly stated that he wants to safeguard as much of the house as possible from care fees once he has died and his wife goes into care.

So....

A) What will would you advise the client to have? And how would you advise the client on:
The likelihood of your chosen will safeguarding his share of the house from care fees; and
C) The likelihood of your chosen will safeguarding his wife's share of the house from care fees.

The client does not want a lifetime trust - just a will.

RobS77

wise_fool wrote: »

You don't seem to have answered my question so I will try and be more specific. Since you have specialised in wills for 8 years, I would like to keep it on this subject rather than life time trusts. I would be interested in how you would deal with a particular scenario. For the benefit of non-legal readers please keep the language simple and jargon free.

Your boss hands you a file note to see a client in hospital who wants a will drawn up. He hasn't got long to live and co-owns a 500k house with his wife. His wife isn't in a position to make a will as she suffers from dementia and is likely to go into care anytime soon.

The file note says that the client has expressly stated that he wants to safeguard as much of the house as possible from care fees once he has died and his wife goes into care.

So....

A) What will would you advise the client to have? And how would you advise the client on:
The likelihood of your chosen will safeguarding his share of the house from care fees; and
C) The likelihood of your chosen will safeguarding his wife's share of the house from care fees.

The client does not want a lifetime trust - just a will.

Odd, I thought I had answered your question already? Not to worry, I will reiterate.

I would advise the client to sever the joint tenancy and put the half-share of the property into a full discretionary trust incorporated in the Will. You can sever unilaterally: are we agreed on that? So the fact she has dementia is irrelevant.

I have I think already made clear already that in my experience, a LA would struggle to overturn a Will of that nature. You would convey the half-share of the property into the names of the Trustees. So his half share is protected, hers will be claimed by LA. Clear enough? Clearly, his Will would not affect her half-share, but by severing you ensure it doesn't all go to wife to be claimed in care home fees by LA.

So on your figures, the £250,000.00 is protected, presuming property is then sold, it can be held on trust and assets managed for wifes benefit for her lifetime, then appointed out after death. Have you been involved in a matter where such a Will has been overturned: in which case which Local Authority was involved?

Clear enough?

If the client doesn't want a trust within the Will, then LA gets the lot- his call.

RobS77

RobS77 wrote: »

I wouldn't ordinarily put the property in a NRB trust, I would normally leave it on a discretionary trust referred to above- certainly when we have done it (actually constituting the NRB trust) have been done in to protect cash assets upto the value of the NRB, and the remainder to spouse- when it is the property we tend to leave on a life interest trust or fully discretionary trust as I mentioned in the post before.

This answers your question I would have thought? Ie leave the property on discretionary trust? You would sever at the same time as signing the Will normally. Obviously it is only the Testator's share of the property affected.......

RobS77

Hey Wise fool: as you are keen on quoting my posts out of context, I thought I would borrow one of yours:

I happen to work in the legal profession and the simple fact of the matter is that anyone can call themselves a will writer. Most of whom are unqualified and unregulated and best avoided. But there are also a good number of solicitors practising in this area that are woefully incompetent. Just reading a few threads on here would confirm that.

You work in the legal profession, fair enough: I agree with your assessment of the state of the private client sector whole-heartedly, but I am also curious as to your apparent scepticism of the benefit of placing assets in a discretionary trust via a Will. You also don't state what sector of law you work in, and have ignored my previous question, as to whether you are a solicitor, which I find a little strange. Why the reticence- do you think I am an internet "groomer?" In which case don't worry, I don't think you are really my type.

What advice would you give a client on the proposal you set out to my good self? I am intrigued to know if there is a way of offering a greater degree of protection than a discretionary trust in the Will in the scenario you described?

sloughflint

RobS77 wrote: »

Odd, I thought I had answered your question already? Not to worry, I will reiterate.

I would advise the client to sever the joint tenancy and put the half-share of the property into a full discretionary trust incorporated in the Will. You can sever unilaterally: are we agreed on that? So the fact she has dementia is irrelevant.

I have I think already made clear already that in my experience, a LA would struggle to overturn a Will of that nature. You would convey the half-share of the property into the names of the Trustees. So his half share is protected, hers will be claimed by LA. Clear enough? Clearly, his Will would not affect her half-share, but by severing you ensure it doesn't all go to wife to be claimed in care home fees by LA.

So on your figures, the £250,000.00 is protected, presuming property is then sold, it can be held on trust and assets managed for wifes benefit for her lifetime, then appointed out after death. Have you been involved in a matter where such a Will has been overturned: in which case which Local Authority was involved?

Clear enough?

If the client doesn't want a trust within the Will, then LA gets the lot- his call.

Why presume the property is sold? Why only settle on protecting half a house? Wouldn't a life interest will protect the whole house if unsold and rented out?

wise_fool wrote: »

the client has expressly stated that he wants to safeguard as much of the house as possible from care fees once he has died and his wife goes into care.

RobS77

sloughflint wrote: »

Why presume the property is sold? Why only settle on protecting half a house? Wouldn't a life interest will protect the whole house if unsold and rented out?

Husbands will only affects his half-share, so the onlyway you could deal with her half-share is to apply for a deputyship (presuming that wife with advanced dementia has no capacity to sign a PoA) and the COP guidelines expressly prohibit deliberate deprivation in respect of nursing home fees.

Who knows what wifes circumstances will be? And no, a life interest would only apply to husband's share, not her share,which could be claimed by LA for fees. If house could be rented out to provide for nursing home fees no problem: but that would be one hell of a rent! Obviously, would be Trustees and deputies choice.

If you know anyway of dealing with someone elses share of a property via a Will, then please share: you are a better lawyer than I am!

sloughflint

RobS77 wrote: »

Husbands will only affects his half-share, so the onlyway you could deal with her half-share is to apply for a deputyship (presuming that wife with advanced dementia has no capacity to sign a PoA) and the COP guidelines expressly prohibit deliberate deprivation in respect of nursing home fees.

Who knows what wifes circumstances will be? And no, a life interest would only apply to husband's share, not her share,which could be claimed by LA for fees. If house could be rented out to provide for nursing home fees no problem: but that would be one hell of a rent! Obviously, would be Trustees and deputies choice.

If you know anyway of dealing with someone elses share of a property via a Will, then please share: you are a better lawyer than I am!

Yes, I had noted the dementia and realised the life interest would only be on the husband's share. But my belief was that the life interest would make the wife's share valueless when it came to LA financial assessment for care fees.I based my comment about the whole house being protected on that fact.

and the COP guidelines expressly prohibit deliberate deprivation in respect of nursing home fees.

Absolutely, but can the husband not write his will in this way if he so wished? The wife is still residing at the property.( Not even sure if that matters)

Would be interested in your thoughts.I'm not remotely interested in care fee planning by the way. It's just things I've happened to pick up over the years.