Living with Partner - Buying New House..Advice Please

RobS77

Baggysdad wrote: »

I agree. I also reckon you can go the other way - appointing out of a life interest into a discretionary trust (or any other settlement) - or at least James Kessler reckons that you can.

The beauty of a life interest is that it doesn't run into problems if the estate of the first to die is greater than the NRB. The whole of the estate of the first to die can go into the trust - and thus be sheltered from the burden of the survivors care fees and it preserves the transferable nil rate band for use in the survivors estate.

It could be argued that if the estate is of such a size, protection from care fees may not be an issue - and probably it won't be - but I would rather factor in the option to protect as much as possible in a trust rather than factor it out.

But for estates below the NRB - and expected to remain below the NRB, then its 'swings and roundabouts' as to which trust is used - subject to the appropriate powers being given to the trustees.

B

Yup, agree wholeheartedly. The discretionary trust strikes back- yeah baby!

My boss has had a couple which I have donesome work on which were old NRB trusts where we appointed out the NRB trust as it was agreed that care home fees weren't an issue due to the value, as you refer to above. Quite agree about the advantage of a LI trust re spousal exemption, particularly an issue in regard to 2nd marriage where the remaindermen are often the kids from the first marriage.

RobS77

Baggysdad wrote: »

Depending on the powers given to the trustees of the discretionary trust, the discretionary trust could give exactly the same protection as a life interest trust. Unfortunately Robs response to my question on this matter referred to a Life Interest Trust, so I guess my answer is 'it depends'.

Maybe Rob can clarify his response to my question tomorrow when he comments on the situation if the value of the property is above the two Nil Rate Bands.

Also looking forward to seeing if Rob and/or his colleague(s) are able to work out the case law that enables an arguable case to be made that such trusts can protect the whole of a house from care fees.

Til tomorrow...

B

Hi Baggsy- depends on the terms of the power of appointment contained in the DT I think you are right- certainly the ones we do can grant a LI, either revocable or irrevocable, so I think it will serve exactly the same purpose re exemption from fees in the example referred to above, at least one which my firm has drafted. So as long as WF drafted his DT will correctly, then he would be able to do exactly the same, if the Trustees thought it was in the spouses interests.

Maybe "our learned friend" WF could comment on the same?

I haven't ever done one, but it is possible to draft a deed of release in which the LT gives up a LI: I suppose it depends on the terms of the trust deed whether it reverts to a discretionary setttement or to the remaindermen, but you will know more about that than me, and I would be interested in WF opinion: I have seen deeds of that nature.

I am not going to argue with Kessler.......

wise_fool

RobS77 wrote: »

Hi WF, if you think I have been pompous, please accept my apologies- I often post very quickly when I am at work as it gives me a brief break from work, and often get caught up in the spur of the moment: I think this forum is fantastic, and I have been reading this forum enthusiastically I can assure you, when a chance presents itself.

Oh yes, you're pompous all right. There was a point today where you almost showed some repentance for your arrogance and ignorance, but I see that was shortlived. I note you've amended all this evening's posts according to which way you think the wind is blowing, perhaps because you think you've managed once again to bluff your way out of a tight corner. You've certainly been 'enthusiastic' all right.

RobS77 wrote: »

And no, if I have given the impression I am STEP qualified, I am only a mere student member. Although all my work before it goes out is checked/amended as required by a partner, all of whom are STEP members, so I have the benefit of being trained/supervised by people who are exceptionally good at their job, and I am very fortunate to be in a firm which does take this area of law seriously. The beauty of being supervised by people like that is they would kick me up the !!!! for any omission......... and then put me right

And I should point out I am far from the finished article- I am 5 and a half years qualified, the 7-8 years included my traineeship....... maybe I was trying to big up my experience?

No you certainly aren't the finished article - you need to get your head out of your backside - and fast.

RobS77 wrote: »

You see, I find this very peculiar- didn't you ask about NRB Wills and whether anyone used them anymore? Whereas they are still worth doing for unmarried couples: do you agree?

Yes, and in some cases for those with business or agricultural assets. I just happen to think that flexible life interest trusts are a better option in most cases. Some advantages baggysdad has already covered - but also discretionary trusts are also much more likely to require the cost of professionals administering two estates and administering a trust in between - all of which is unnecessary now that we have the transferable nil rate band. Since we all have a duty to act in the best interests of our clients I explain the pros and cons of a particular course of action and let them make an informed choice according to their circumstances.

RobS77 wrote: »

Yes, the precedent I normally use is from Butterworths for a lifetime trust includes the power to permit occupation of trust property- you can either do it by deed of appointment or resolution.

There is no one size fits all solution. The will should be tailor made to the clients circumstances. Over-reliance of precedents is lazy and sloppy.

RobS77 wrote: »

I guess that if on the death of a first partner, IHT was payable, you might fill your own Rule 15 letter with a bit of jargon, and let your PII guysknow as well?

I personally try to avoid the use of unnecessary jargon - my clients appreciate me advising things in a clear way. I'm not in the business of committing negligent acts so I certainly don't copy my insurers into my correspendence to clients.:eek:

RobS77 wrote: »

Hey WF, just had another think about this: the beauty of course about discretionary trusts is their inherent flexibility. So all you need to do is appoint out a life interest in the property to the surviving spouse if the case law at the time makes it in the Trustees interest to so do, and you get both protection of surviving spouses half-share, plus that of Deceased.

Thoughts?

You've certainly changed your tune. You initially said you could only safeguard half of a property with a discretionary trust, but since baggysdad has posted you are now stating quite categorically that you can safeguard the whole property. Even though you have no idea what the legal authority is.

Thoughts?

It's also worth bearing in mind that if the trustees 'lend' the assets to the surviving spouse - and this is quite often upon the death of the first spouse - then for care fees purposes the surviving spouse will be assessed as owning the house less the 'debt' - and therefore half of the house is up for grabs. A lot therefore hinges on what the trustees decide to do.

RobS77 wrote: »

Yup, agree wholeheartedly. The discretionary trust strikes back- yeah baby!

I have only one word for this statement - bizarre. What's with the celebration?

RobS77 wrote: »

Oh, and you haven't answered the point either about the appointment of a life interest from a DT, which Kessler agrees with me that you can do.

I am sure Mr Kessler is very impressed with you. Refer him to this thread and I'm sure he'll be even more so. While you're at it get your supervising partner to take a look too.

RobS77 wrote: »

Whereas you are a hardcore CRAG geezer who knows asset protection backwards.

Thanks for the endorsement. It's handy to know the law when advising clients.

RobS77 wrote: »

And yes, advice would almost certainly be different regarding a taxable estate: but I am off to the gym now so will post tomorrow!

I look forward to your answers to baggydad's questions.

Triker

Re Wise Fools post... can't you just be a bit decent instead of constantly throwing insults around?

That's really not what this site is about....

Martin's post

Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps.

property.advert

Hang on, she has 110k-40k=70k and he has 50k. If they both put in 50k each and buy for 180k then there is only an 80k mortgage and they own 50% each. He has to pay 50% going forward though. If she puts in the other 20k, then she is 70/120=58.33% and he is 50/120=41.67%

Don't know where people get 30% from.

RobS77

wise_fool wrote: »

Oh yes, you're pompous all right. There was a point today where you almost showed some repentance for your arrogance and ignorance, but I see that was shortlived. I note you've amended all this evening's posts according to which way you think the wind is blowing, perhaps because you think you've managed once again to bluff your way out of a tight corner. You've certainly been 'enthusiastic' all right.

No you certainly aren't the finished article - you need to get your head out of your backside - and fast.

Yes, and in some cases for those with business or agricultural assets. I just happen to think that flexible life interest trusts are a better option in most cases. Some advantages baggysdad has already covered - but also discretionary trusts are also much more likely to require the cost of professionals administering two estates and administering a trust in between - all of which is unnecessary now that we have the transferable nil rate band. Since we all have a duty to act in the best interests of our clients I explain the pros and cons of a particular course of action and let them make an informed choice according to their circumstances.


There is no one size fits all solution. The will should be tailor made to the clients circumstances. Over-reliance of precedents is lazy and sloppy.


I personally try to avoid the use of unnecessary jargon - my clients appreciate me advising things in a clear way. I'm not in the business of committing negligent acts so I certainly don't copy my insurers into my correspendence to clients.:eek:

You've certainly changed your tune. You initially said you could only safeguard half of a property with a discretionary trust, but since baggysdad has posted you are now stating quite categorically that you can safeguard the whole property. Even though you have no idea what the legal authority is.

Thoughts?

It's also worth bearing in mind that if the trustees 'lend' the assets to the surviving spouse - and this is quite often upon the death of the first spouse - then for care fees purposes the surviving spouse will be assessed as owning the house less the 'debt' - and therefore half of the house is up for grabs. A lot therefore hinges on what the trustees decide to do.
I have only one word for this statement - bizarre. What's with the celebration?



I am sure Mr Kessler is very impressed with you. Refer him to this thread and I'm sure he'll be even more so. While you're at it get your supervising partner to take a look too.


Thanks for the endorsement. It's handy to know the law when advising clients.


I look forward to your answers to baggydad's questions.

Hi baby, Thanks for your reply. I amended the post on further consideration I figured out that a DT could perform exactly the same function as a LI, by appointing out the same, so obviously I changed what I was saying. Are you seriously suggesting that you always arrive instantaneously at the right opinion? Part of the skill of a lawyer is to reflect on the issues and come to a considered position you would agree?

You are a rather strange individual I give you that, throwing around accusations of pomposity while showing hubris that even Gordon Brown would be embarrassed by: frankly you are also a bit of a c/ock. I am quite happy to admit my limitations whereas you can't even accept that you are wrong about appointing out a life interest. My supervising partner would probably think me taking an interest in my job and exchanging opinions as to potential options in a particular scenario with fellow professionals actually showed a wish to learn.

Are you STEP qualified yourself? You still haven't answered that, which suggests you either aren't, or you are old school and got in due to length of service rather than having to take the qualification.

And you are online at 2 in the morning? Woah, I thought I was sad......

Anyway, I am out of the office for the next few days, so won't have the chance to reply for a bit: please don't accept that as any admission that I am somehow intimidated by you- far from it, the more you post the more delighted that I work where I do. And as for getting my head out of my a/rse- yours is so far up you are in your own brain cavity......

Isn't it great when threads descend into personal abuse?

wise_fool

Triker wrote: »

Re Wise Fools post... can't you just be a bit decent instead of constantly throwing insults around?

That's really not what this site is about....

I am sorry if I have offended the spirit of the forum as I fully understand it is about helping others. You might want to take a look at a few of RobS77's remarks as he's got quite a bit of 'form' himself.

RobS77 wrote: »

I am quite happy to admit my limitations whereas you can't even accept that you are wrong about appointing out a life interest.

Since you seem to have a real fixation about this I will deal with this point first. Most discretionary trusts are unable to appoint life interests. You may well have found one that can. I daresay James Kessler, the fine QC that he is, who you have previously mentioned, may do a discretionary trust precedent with bells and whistles that you use.

Personally I wouldn't use Kessler precedents as I am not entirely comfortable with the wording. Unless I absolutely fully understand word for word what the particular clause means - and more importantly can get my client to understand it - I stay well away.

Unfortunately in my experience I have found that many 'professionals' quite often adopt a one size fits all approach without fully understanding the implications of what the particular will or trust actually does further down the line. It is not sufficient to hide behind legal jargon and hope for the best.

In any case, quite often there is a far simpler, yet more practical solution that doesn't require the client's executors having to pay fortunes to lawyers later on to try and interpret.

RobS77 wrote: »

Are you STEP qualified yourself? You still haven't answered that, which suggests you either aren't, or you are old school and got in due to length of service rather than having to take the qualification.

It is irrelevant. I may be a trainee solicitor, a consultant or a retired probate registrar. What does it matter - who cares?

RobS77 wrote: »

I amended the post on further consideration I figured out that a DT could perform exactly the same function as a LI, by appointing out the same, so obviously I changed what I was saying.

You amended more than one post and removed many others. I would submit you figured out nothing for yourself - but relied on another poster that you don't even know.

I find it very worrying that an experienced solicitor is churning out wills without fully understanding what effect they are having on protecting the estate. As we can see from posts on this other thread which you were frantically amending or removing for almost 5 hours, you quite clearly don't understand the rules regarding long term care.

Here's the thread here as a reminder - http://forums.moneysavingexpert.com/showthread.html?t=2182057

And despite saying this yesterday in response to baggysdad's questions:

RobS77 wrote: »

I am off to the gym now so will post tomorrow!

You now say this:

RobS77 wrote: »

Anyway, I am out of the office for the next few days, so won't have the chance to reply for a bit:

That is very disappointing as I was looking forward to your answers. Is this delay a ploy to buy you some time I wonder?

RobS77 wrote: »

Hi baby, Thanks for your reply...frankly you are also a bit of a c/ock....And you are online at 2 in the morning? Woah, I thought I was sad....And as for getting my head out of my a/rse- yours is so far up you are in your own brain cavity......Isn't it great when threads descend into personal abuse?

These are not exactly the remarks I would expect from an experienced solicitor. Coupled with your breathtaking arrogance and ignorance of the law you are not exactly a brilliant advertisement to the legal profession that you are representing.

Shame on you Rob.

Willo1972

I think the original post actually referred as to how to hold the "new" property

Answer Tenants in Common backed up by a declaration of Trust

Read the original post people