Putting property into 'Trust'

bri160356

Hi, my father, who is in ‘reasonable’ health for an 89 year old, was recently visited by a ‘doorstep solicitor’ and advised that by putting his home into ‘Trust’ he could avoid his house being ‘seized’ by the local authority to pay his ‘fees’ should he ever need to go into a care home. He owns his home outright –probably worth about £275k.

The beneficiaries of the ‘trust’ would be his two sons i.e.myself and my brother.

My father is aware of a situation known as ‘deprivation of assets’ where people attempt to ‘gift’ their property to their children to avoid it being ‘seized’ by the local authority but he believes that this is completely thwarted by the local authority being able to back-track many years to prove that people were deliberately hiding assets/funds etc.

However, the ‘Solicitor (?)’ assured him that after a period of 6 months, the property held in ‘Trust’ is completely untouchable and cannot be ‘seized’ by the local authority as it is no longer his personal asset. All this legal work – wills/Trusts etc etc would of course attract a fee of £900 +vat for the Solicitor involved.

Does anyone have any knowledge or personal experience of this kind of ‘Trust’ arrangement?

Does it protect assets as the Solicitor described?

Any info gratefully received.

Regards

margaretclare

A 'doorstep solicitor'? Are there such people? Alarm bells start ringing immediately.

We have a simple principle at this house, and although we're only a decade younger than your Dad, we haven't yet lost our marbles. We never never never buy anything on the doorstep or from the doorstep!

Reputable solicitors don't work from the doorstep uninvited. They work from an office and you make an appointment to go and see them, ask their advice. They never - repeat never - give their advice unsolicited and unpaid-for.

I could pick holes in the argument i.e. 'seized' - the LA are not the Gestapo! However, the main thing I would counsel your Dad to do is, have nothing to do with any such scheme on the grounds I have outlined above.

Further, the likelihood is that your Dad, having survived to 89, will continue to live out his days in peace and harmony in his own home. It is still only a minority of people who end their days in a care home.

HTH

pmlindyloo

bri160356 wrote: »

Hi, my father, who is in ‘reasonable’ health for an 89 year old, was recently visited by a ‘doorstep solicitor’ and advised that by putting his home into ‘Trust’ he could avoid his house being ‘seized’ by the local authority to pay his ‘fees’ should he ever need to go into a care home. He owns his home outright –probably worth about £275k.

The beneficiaries of the ‘trust’ would be his two sons i.e.myself and my brother.

My father is aware of a situation known as ‘deprivation of assets’ where people attempt to ‘gift’ their property to their children to avoid it being ‘seized’ by the local authority but he believes that this is completely thwarted by the local authority being able to back-track many years to prove that people were deliberately hiding assets/funds etc.

However, the ‘Solicitor (?)’ assured him that after a period of 6 months, the property held in ‘Trust’ is completely untouchable and cannot be ‘seized’ by the local authority as it is no longer his personal asset. All this legal work – wills/Trusts etc etc would of course attract a fee of £900 +vat for the Solicitor involved.

Does anyone have any knowledge or personal experience of this kind of ‘Trust’ arrangement?

Does it protect assets as the Solicitor described?

Any info gratefully received.

Regards

Not withstanding the excellent advice given about trusting a'doorstep solicitor' this is a perfectly legal way of reducing the amount of fees payable for care home fees.

You can do your own research about this on the internet and then look for a professional and reliable source if you wish to explore this further.

I will not comment or get into a discussion about the state paying for care but just address your question. Yes, this is possible but get some professional advice.

splodger_seedswapper

i agree with the above post from margaretclare - never, never, never agree to any contract / buy anything - from the doorstep

a reputable solicitor / firm of lawyers would not be doorstepping for business - but a rogue cold calling firm (like ppi claims or no win no fee centres would cold call - as they make their money by charging high fees / commission etc)

on the subject of trusts - i know that property and land can be put into trust - but i would advise that you contact your own solicitors to discuss this sort of arrangement.

my father has set up a similar sort of trust - as part of his will - so only actionable on his death - i don't know if such a trust can be legally set up and activated whilst the donor is still living

what ever you do - don't use a doorstep salesman as a solicitor

JuneBow

Two things
Firstly, as mentioned above, reputable firms of solicitors do not go door to door. This is likely to be one of these will writing firms.

Secondly, this is completely incorrect.

pmlindyloo wrote: »

this is a perfectly legal way of reducing the amount of fees payable for care home fees.

Hiding money in order to claim either state benefits or LA care is benefit fraud and illegal. You can go to prison for benefit fraud.

Whilst I appreciate that this is done regularly, it is still benefit fraud.

I answered a similar question a couple of weeks ago.

https://forums.moneysavingexpert.com/discussion/comment/54526811#Comment_54526811
I would also add that it is incorrect that the LA can "only go back 6 months".
If the LA suspect deprivation of assets or hiding assets in order to claim means tested benefits they can go back as far as they like. They can request file notes from advisors, and if this "solicitor" is saying "put your house in trust so you can claim means tested assets" then this will be on his file notes.

Poppie68

[
I will not comment or get into a discussion about the state paying for care ......

Even though you never 'went there'...i'm in agreement with you.

pmlindyloo

JuneBow wrote: »

Two things
Firstly, as mentioned above, reputable firms of solicitors do not go door to door. This is likely to be one of these will writing firms.

Secondly, this is completely incorrect.



Hiding money in order to claim either state benefits or LA care is benefit fraud and illegal. You can go to prison for benefit fraud.

Whilst I appreciate that this is done regularly, it is still benefit fraud.

I answered a similar question a couple of weeks ago.

https://forums.moneysavingexpert.com/discussion/comment/54526811#Comment_54526811
I would also add that it is incorrect that the LA can "only go back 6 months".
If the LA suspect deprivation of assets or hiding assets in order to claim means tested benefits they can go back as far as they like. They can request file notes from advisors, and if this "solicitor" is saying "put your house in trust so you can claim means tested assets" then this will be on his file notes.

My apologies to everyone. I read the thread far too quickly - must do better.:cool:

A property trust is usually done for when one of a couple dies and that share of the property is put into trust. In this way half of the property is protected (that's putting it simply). I wrongly assumed that this was the case in the OP's situation.

Putting a property into trust in the circumstances described by the OP (and now understood by me ) can be seen as deprivation of capital. The phrase 'in order to avoid care home fees' is the relevant part.

Companies do still advertise this and no doubt many people go ahead believing the sales talk.

However, social services are relentless in persuing payment for care home fees so if you do intend to go this route you need to be very very careful and get legal advice.

bri160356

pmlindyloo wrote: »

My apologies to everyone. I read the thread far too quickly - must do better.:cool:

A property trust is usually done for when one of a couple dies and that share of the property is put into trust. In this way half of the property is protected (that's putting it simply). I wrongly assumed that this was the case in the OP's situation.

Putting a property into trust in the circumstances described by the OP (and now understood by me ) can be seen as deprivation of capital. The phrase 'in order to avoid care home fees' is the relevant part.

Companies do still advertise this and no doubt many people go ahead believing the sales talk.

However, social services are relentless in persuing payment for care home fees so if you do intend to go this route you need to be very very careful and get legal advice.

Hi Pmlindyloo ,

Many thanks for the reply to my OP; you appear to have agreat depth of knowledge on many things judicial; are you from a legal background? (My apologies if forum rules don’t allow that sort of question.)

I was a little intrigued by the apparent u-turn between your initial post and this recent one with respect to putting a property into trust to protect it if one partner dies. Maybe a little more background to my parents situation is needed. As I stated in my OP my father is 89 and in ‘reasonable’ health; however he is certainly not as ‘savvy’ as he once was and can be quite vulnerable to suggestions (from 3rd parties) and is very prone to bouts of impetuousness.

My mother who is 86, is severely physically disabled and partially mentally disabled after a stroke in June 2010 and she will most certainly need the facilities of a care home if my father’s demise precedes hers.

Perhaps my (Original Post) description of the 'doorstep Solicitor' was a little disingenuous ;( it now appears my father responded to a 'flyer' that was pushed through his letterbox); the person who came to visit my father was a ‘representative/Solicitor(?)' of a National Legal services company.

Nonetheless, many thanks to all the forum members for their replies and advice about the ethics of door-step selling etc. However, I am still uncertain as to whether putting a house into ‘Trust’ is a worthwhile thing to do in my father’s case specifically.

Several, apparently very knowledgeable members, appear to advise that by using a Solicitor to put a house into ‘Trust’ will, by default, be seen by the Local Authority as an attempted ‘deprivation of assets’ at some unspecified point in the future – maybe years. Also that the Solicitors ‘notes’ would show up this document as being ‘used to hide assets’; would any competent Solicitor be so lax as to put phrases like that into ‘notes’ or a legal document? Also, would any competent and scrupulous Solicitor enter into this type of ‘Trust’ arrangement if it was in any way unethical?

Indeed, there seems to be something of a paradox regarding some forum members advice about seeking a reputable Solicitors guidance regarding ‘protecting’ properties by ‘Trust’ when this very same service is actually being advertised, in my father’s local area, by several old and ‘apparently’ reputable firms of Solicitors. (my father has already booked a visit to one such Solicitor....... I said he was impetuous; apart from tie him to the bed there is not much I can do to stop him.)

Incidentally, I am in no way attempting to condone, justify or actively involve myself in any act of fraud or deception to ‘evade’ any rightful costs/bills/dues etc.

So Pmlindyloo, any thoughts or advice that spring into your wonderfully knowledgeable mind that could shed more light on my father’s ‘situation’.

Many thanks and regards.

Mojisola

bri160356 wrote: »

My mother who is 86, is severely physically disabled and partially mentally disabled after a stroke in June 2010 and she will most certainly need the facilities of a care home if my father’s demise precedes hers.

Several, apparently very knowledgeable members, appear to advise that by using a Solicitor to put a house into ‘Trust’ will, by default, be seen by the Local Authority as an attempted ‘deprivation of assets’ at some unspecified point in the future – maybe years. Also that the Solicitors ‘notes’ would show up this document as being ‘used to hide assets’; would any competent Solicitor be so lax as to put phrases like that into ‘notes’ or a legal document? Also, would any competent and scrupulous Solicitor enter into this type of ‘Trust’ arrangement if it was in any way unethical?

The solicitor probably wouldn't put that in their notes but the LA will assume it was done for DOC reasons unless you can come up with another reasonable explanation. Good luck with that!

pmlindyloo wrote: »

A property trust is usually done for when one of a couple dies and that share of the property is put into trust. In this way half of the property is protected (that's putting it simply).

Putting a property into trust in the circumstances described by the OP (and now understood by me ) can be seen as deprivation of capital. The phrase 'in order to avoid care home fees' is the relevant part.

However, social services are relentless in persuing payment for care home fees so if you do intend to go this route you need to be very very careful and get legal advice.

As lindy says, there is a legitimate way of protecting half of the value of the property. The property needs to be owned as "tenants in common" and they must have wills leaving their share of the house to someone other than their spouse. The share of the house is usually put in a trust to protect the surviving spouse's right to stay in the property.

What can't be done is to give away capital or a property so that you don't have to pay your own care home fees.

Also, if one of a couple needs residential care and the other will stay in the house, the value of the house is disregarded in the financial assessment.

margaretclare

Now the OP has clarified a bit more...

Bri160356, you didn't mention your mother in your first post. It sounds as if she is in worse health than your Dad and may yet be in need of long-term residential care before your Dad, if he ever does. If this is the case, as Mojisola says, the value of the house will be disregarded as long as he continues to live in it and only your mother's assets/income will be taken into account.

Regarding the advice to have title in your parents' names as tenants-in-common, it would perhaps be worthwhile enquiring of your parents how title is held at present. It was very common for an earlier generation to have title in the husband's name only, on the grounds that he was the breadwinner and the wife had no income of her own.

HTH

Mrs_Arcanum

margaretclare wrote: »

Now the OP has clarified a bit more...

Bri160356, you didn't mention your mother in your first post. It sounds as if she is in worse health than your Dad and may yet be in need of long-term residential care before your Dad, if he ever does. If this is the case, as Mojisola says, the value of the house will be disregarded as long as he continues to live in it and only your mother's assets/income will be taken into account.

Regarding the advice to have title in your parents' names as tenants-in-common, it would perhaps be worthwhile enquiring of your parents how title is held at present. It was very common for an earlier generation to have title in the husband's name only, on the grounds that he was the breadwinner and the wife had no income of her own.

HTH

Was in these circumstances my Father left the house in trust for my brother, a couple of his grandchildren & me. My mother lived there for 30 years after he died but did have some death duties/inheritance tax to pay at the time as he did not leave chattels the same way.