Put dads house in trust?

Lashes72

Hi - looking for some advice please!

My dad is 75, he lives in sheltered accommodation which he pays rent on, as he has a property that he rents out which pays his existing rent on his flat essentially.

I am registered as a lasting power of attorney for his financial affairs should he lose mental capacity - at this time he retains capacity although has short term memory issues and accesses a LA funded day centre 3 days a week.

The LA also fund his carers who attend his flat for personal care and food preparation. This, I believe is because his house is classed as giving him an income, and when he was financially assessed with this income, as he then spends it on his rent in his sheltered accommodation, he meets the threshold to have his care paid.

Dad has a will made out and feels strongly that he does not want his house to have to be sold should he need full time residential care in the future, he wants to leave it to family in his will.

He has seen a solicitor who advises that as he is in the system for LA funded care, there is no way around this.

Inheritance solutions, a company dad has contacted have advised that he can put his property into a trust. However, as he is in receipt of LA funded care, this is not a guarantee. They quote 2500 for this to be done which appears both expensive and a risk. Cost aside as I am sure there is a cheaper company, has anyone experience or advice regarding this please? Is it worth doing and will it protect the asset?

Many thanks

S

TBagpuss

Ask the solicitor specifically about this. However, I think that this would be considered a deprivation of assets.

Is the solicitor your dad saw a member of STEP and Solicitors for the Elderly? If not, it may be worth getting a second opinion from one who is.

This might have worked had it been done before your dad got to the point of needing support. I think he would find he had wasted his £2,500

Savvy_Sue

Lashes72 wrote: »

Dad has a will made out and feels strongly that he does not want his house to have to be sold should he need full time residential care in the future, he wants to leave it to family in his will.

My view has always been that had Mum and / or Dad needed residential care, I'd have preferred them to have the choice of where they went rather than going wherever the local authority was prepared to put them. A house at some indeterminate point after their deaths would have been no substitute for them having the very best care available in life. But moving on ...

I don't think the local authority can force the sale of his house. Is there any reason why he could not continue to rent it out, and use the proceeds for care home fees? If there's a shortfall, then this can EITHER be paid for by other means (although take advice, as there are complications around who and when the local authority can require the payment of top-up fees, OR a charge can be put on the home, meaning that the fees would be paid once the house is sold.

elmer

Dad has a will made out and feels strongly that he does not want his house to have to be sold should he need full time residential care in the future, he wants to leave it to family in his will.

Who does your Dad think should fund his living costs if he goes into care with assets of a house, if not him?

Are you going to look after him if he doesn't want to pay for care?

As Im afraid I don't want to be paying for him when he has enough assets to pay for himself.

troubleinparadise

That your father already receives LA funded home and day care despite owning a property and therefore probably exceeding the minimum threshold for LA assessed funding is a rare thing in these financially-straitened times. There are many who would be grateful to be receiving that funding.

Whilst this company you mention are asking him to pay £2500 to look into putting his house in trust (without guarantee), that he receives care already is suggestive that he has a condition that may need residential care in the future. To attempt to remove the asset (the house) to avoid paying for that care could look like a deliberate attempt to deprive himself of assets. How often an LA pursues a case of deprivation of assets is a moot point, but it is a risk nonetheless, and he could find himself unable to pay for his own care and the LA refusing to fund it as well.

He may never need residential care, or family could provide the care he needs to avoid him having to go into residential care, and thereby he can keep his house.

Many people would like to keep their assets and not have to fund care, but that is the situation as it stands at present. Those that can afford it have to pay, those that cannot are funded. I suspect that he would be throwing away the £2500 - if there was a guaranteed method of achieving what you want I think you would find many posts about it, let alone finding a cheaper company.

Browntoa

It's definitely deprivation of assets if done now , should have been done years ago

zygurat789

Lashes72 wrote: »

Hi - looking for some advice please!

My dad is 75, he lives in sheltered accommodation which he pays rent on, as he has a property that he rents out which pays his existing rent on his flat essentially.


S

This rental income is declared to HMRC isn't it?

pollypenny

OP, your father is very lucky to have funded carers, since he has assets.

If he has to have residential care at some point, he will have to pay for it. He can't live in two places, so either continue renting his house or sell it.

You can't expect the taxpayers, namely people like we who have posted here, to pay so that you inherit.

SeniorSam

It may be that you have not been fully informed regarding the Trust element. If the property were put into Trust, then the Trust it would need to be administered by the Trustees and if family members did not want the trouble, then professional Trustees would be charging considerably and all income would be taxed as Trust income.

It would not be unreasonable to have the property put into joint names with the children, but as said above, the care costs will need to be met from assets should the need arise. Consider also, that such action may bring Capital Gains Tax into the equasion when considering the value at transfer to the children and date of actual sale, so althougth part of the property may be saved, be careful of all aspects in such action.

Sam