Putting home into family trust to avoid nursing home fees

Horseygirl123

I've only just discovered this board and it's got me thinking of quite a few things and how I'm not prepared for the future.

Lessonlearned has raised some interesting points. At 54 I have two friends who have parents in care homes. One parent has sadly just died and my friend calculated that the care home has cost almost 200k funded from the sale of her property. The other friends parent who has lived in social housing for many years is now in a lovely care home which is paid for by the state and topped up by £200/week by the family. It is like a hotel and much nicer than the other one which at £750/week was all they could afford.

I would like to leave my two daughters more than £23k though (assuming I had to go into a care home.

My husband is 18 years older than me although in excellent health and still working at 72. His family have an excellent record of being fighting fit up to their 80s/90s and then just dropping dead whereas my family have all sorts of problems including dementia.

I think the time is right for us to update our wills and think seriously about a trust. If my husband dies before me which is probably quite likely, I would downsize and give as much money to my daughters as I could.

robins66

We may not live in a communist country and whilst the State does not actually seize assets as in the phrase "taken by the State" I think the meaning of downshifters comment is well understood.


Really?
Tell that to a Northern Rock Shareholder!

lessonlearned

robins66 wrote: »

We may not live in a communist country and whilst the State does not actually seize assets as in the phrase "taken by the State" I think the meaning of downshifters comment is well understood.


Really?
Tell that to a Northern Rock Shareholder!

Point taken.

I was, however, referring to the seizing of assets to fund care and not losing them because of a bank collapse.

That's another matter entirely.

Thankfully we've learned from that and there is now some measure of protection with bank deposit schemes that have been set up as a result of the Northern Rock debacle.

downshifter98

Mojisola wrote: »

This isn't a problem for the council. They will set up a deferred payment scheme where they pay the weekly costs and put a charge on the house. They will reclaim the debt when the house is eventually sold.

Yes that would make sense - Dad is not the type of person to want to avoid paying his fair share (probably part of why mum thought of this in the first place) so if care was needed I know we would just sell the house, use Dad's half up (he has no other assets to speak of) and then switch to top ups when needed. No Landlord wannabes in my family haha.

Doc_N

If you have surplus assets, why not simply do as someone above has done - just make gifts, large or small, to your children or other relatives?

Trying to use trusts to safeguard the money is unlikely to work because of the deprivation of assets rules that local authorities will invariably apply now - as soon as you tell an advisor that you want to avoid contributions towards care home fees, any scheme they suggest will automatically fail. They'll tell you, of course, that their scheme is different, and that it will succeed. But it can't, and it won't - you'll just end up losing the money they charge in fees, and by the time you (or your trustees) find out that the trust was ineffective, it will be too late to do anything.

The welfare state wasn't set up to fund those who have plenty of money, but those who complain about losing their inheritance (which is where most of the complaints come from) miss that crucial point.

Give your money away (though even this can be caught by the deprivation of assets rules if it can be shown that it was done to avoid contributions towards care home fees) when your children most need help. Now, rather than when they're financially well set up. Sooner, rather than later. Do them some real good when they really need help - and particularly if it helps them to buy the house they really need.

lessonlearned

I think the gifting option is perhaps only viable for those of us in say our late 50s to around early 70s who are in good health and who (barring accidents or bad luck) are unlikely to,need residential or nursing care for at least 10 years or so.

For people of my parents generation, ie currently in their 80s and 90s which I think is the generation we are mainly talking about, this is not, and probably has never been, a realistic proposition.

In many families they will be the first people of that family to own their own property, so there will have been no trickle down effect, ie no money passing from the previous generation to ease their path through life.

What they have built up hAs been done by their own efforts.

There is another issue here.

People of my generation, I'm 63, are by and large a bit more more financially sophisticated than most of our parents, we've known for some time that we have to think about future care needs. We know that we are likely to live to be a fair old age and will need care.

Our parents didn't realise this. They never expected to live as long as they have.

There is another moral issue here too.

Our parents were promised care "from the cradle to the grave". Nye Bevan promised them. Most of them believed him......so didn't think about making extra provision until it was too late.

Finally, there is a more important betrayal at work.

This is The generation that made huge sacrifices for us, risking life and limb on the battlefields of WWII. My father gave 9 years of his life to the military.

I genuinely believe that we owe this generation a debt of gratitude and that they should be cared for in their old age as payment for our debt.. Most of them gave up the best years of their youth for us and the State owes them.....

That generation should have their care paid for, not have their assets stolen from them.

We owe them, the State owes them.

Mojisola

lessonlearned wrote: »

Our parents were promised care "from the cradle to the grave". Nye Bevan promised them. Most of them believed him......so didn't think about making extra provision until it was too late.

No-one from that time expected to be housed and looked after for free when they got old. The only 'residential homes' were long stay wards in hospitals. They weren't places that anyone hoped to finish their days in.

lessonlearned

Mojisola wrote: »

No-one from that time expected to be housed and looked after for free when they got old. The only 'residential homes' were long stay wards in hospitals. They weren't places that anyone hoped to finish their days in.

No indeed, they didn't expect to be kept for free, but then neither did they expect to be robbed blind. They put their faith and trust in the powers of the day.

They knew full well they would be expected to stand on their own two feet and sink or swim by their own efforts.

............Provided they were hale and hearty.......

But when they got old and sick and too frail to care for themselves??? when they developed dementia and were unsafe to live on their own.....?????

What then.......

When they had given the best years of their youth to fight for their country either in the battlefields of Europe or in the war factories here......

At a time When they should have been establishing their own careers and growing their own earning power .....

I still say we owe them.

Just that one generation who gave us so much.

We squander more than enough in other areas, we should pick up the tab.

For the succeeding generations who have had more time to make adequate provision then it's a different kettle of fish. Of course we should do our level best to make our own provision.

Even so, it's still a ridiculous post code lottery. If you live North of the border And need care you are not robbed blind.

Scotland has found a way to a fairer charging system. Why can't we.

The problem with our current ludicrous system is that it actively discourages people from making provision for the future.

When They see people who have made absolutely no provision enjoying the same level of care that either they or their families are paying you can't blame them for,thinking that the system is one screwed up mess that penalises the thrifty and prudent.

You can understand why some people are startiing to think why bother, let's just blow the lot and let the State pick iup the tab when the time comes.

You only have to look at the S K I E R acronym to see the truth of that. Why skimp and save when you can blow it all on cruises.

(Not my viewpoint - but it's what a lot of people do think).

Then of course those who have tried to think outside the box and increase their pension income and build up some assets through a couple of BTLs are also slated for "pushing up house prices" and being greedy.....

It's all a bit no win isn't it.

Doc_N

downshifter98 wrote: »

That generation should have their care paid for, not have their assets stolen from them.

They will have their care paid for, provided that there's a financial need - that was Nye Bevan's 'promise'. There never was any assurance that those with substantial financial assets, such as a house, would be funded by the state.

And isn't it those who stand (or stood) to inherit that are the ones complaining about 'stolen' assets?

Mojisola

lessonlearned wrote: »

No indeed, they didn't expect to be kept for free, but then neither did they expect to be robbed blind. They put their faith and trust in the powers of the day.

They knew full well they would be expected to stand on their own two feet and sink or swim by their own efforts.

............Provided they were hale and hearty.......

But when they got old and sick and too frail to care for themselves??? when they developed dementia and were unsafe to live on their own.....?????

What then.......

They would have expected to live with a relative and be cared for by them. If they had no-one, they would have had to manage, get put into a long stay dementia or stroke ward or die.

When they had given the best years of their youth to fight for their country either in the battlefields of Europe or in the war factories here......

At a time When they should have been establishing their own careers and growing their own earning power .....

I still say we owe them.

My parents were from this generation. They worked hard and saved, even though they didn't earn a great deal. They also benefited from the extraordinary rise in house prices over the years.

The unearned money from the sale of their house meant that I could chose which home Dad spent his last months in. His money was spent on him until he didn't need it any more.