Creating a Trust for our house

cushty

We have been advised to put our house into a Family Trust with myself, my husband and two children, 45 and 43, as Trustees. We have been told that this will allow our children to sell the house when we both die (hopefully not too soon!) without having to go to probate, We are also keen that should the worse happen and one or both of us need residential care, the local authority won't be able to make us sell the house to pay for fees.

I'm suspicious - my Dad always said that if something looked too good to be true, it usually is! Is this too good to be true? Does anyone have any views or advice on this please?

LindaMary

Google Deprivation of Assets. If you go into care the local authorities can go back as far as they like to see if you tried to avoid care fees

Mojisola

cushty wrote: »

We have been advised to put our house into a Family Trust with myself, my husband and two children, 45 and 43, as Trustees. We have been told that this will allow our children to sell the house when we both die (hopefully not too soon!) without having to go to probate, We are also keen that should the worse happen and one or both of us need residential care, the local authority won't be able to make us sell the house to pay for fees.

I'm suspicious - my Dad always said that if something looked too good to be true, it usually is! Is this too good to be true? Does anyone have any views or advice on this please?

If you haven't already been charged a lot of money for this advice, you will be when you set up the trust.

If one of you ever needs residential care, the value of your home will be ignored. If both of you or the surviving partner needs care, wouldn't you rather choose where you spend your last years rather than going into the cheapest home that the council can find?

kidmugsy

cushty wrote: »

We have been advised

By whom? On whose initiative?

cushty

LindaMary wrote: »

Google Deprivation of Assets. If you go into care the local authorities can go back as far as they like to see if you tried to avoid care fees

Definitely food for thought and the need for further research. Thank you

xylophone

Trusts can be complex from the point of view of tax.

http://findlaw.co.uk/law/estate_planning/trusts/tax-on-uk-family-trusts-or-payments-from-a-trust.html

Regarding care home fees, don't be so sure that a Trust will protect you....

http://www.thompsonspropertytax.co.uk/state-benefits/giving-away-your-home-to-avoid-care-home-fees-deprivation-of-assets

"Deliberate deprivation of assets occurs when someone gives away assets or income in order to claim either means tested benefits or care home fee funding.

This can take many forms such as

Transferring an asset such as your home to someone else
Selling as asset at an undervalue
Transferring your asset into another asset which will not be taken into account for means testing.
Putting your assets into an irrevocable trust
Local Authorities have wide powers to decide what is and what is not deprivation of assets and can even consider extravagant spending a deprivation of assets in a lot of circumstances."

cushty

Mojisola wrote: »

If you haven't already been charged a lot of money for this advice, you will be when you set up the trust.

If one of you ever needs residential care, the value of your home will be ignored. If both of you or the surviving partner needs care, wouldn't you rather choose where you spend your last years rather than going into the cheapest home that the council can find?

A very valid point that I hadn't thought of - thank you. And I need to do more research on how care is funded.

I would just like the money from our house, our only asset, to go to our kids, not on care fees. We had to sell my Mum's bungalow to pay for her fees - she had vascular dementia and needed 24/7 care. I looked after her for as long as I could, but eventually I couldn't cope. her fees and other bequests meant that my inheritance dwindled to £10K. No regret on my part though as her care home was excellent and they looked after her emotional as well as her physical and medical needs

cushty

kidmugsy wrote: »

By whom? On whose initiative?

It was from a cold call, just after I'd been refused retrospective funding for my Mum's care, so was open to this kind of proposition. But I'm beginning to wonder now.

Mojisola

cushty wrote: »

No regret on my part though as her care home was excellent and they looked after her emotional as well as her physical and medical needs

Don't you think your kids would rather that you were looked after just as well if that became necessary rather than inherit some money?

cushty

xylophone wrote: »

Trusts can be complex from the point of view of tax.

http://findlaw.co.uk/law/estate_planning/trusts/tax-on-uk-family-trusts-or-payments-from-a-trust.html

Regarding care home fees, don't be so sure that a Trust will protect you....

http://www.thompsonspropertytax.co.uk/state-benefits/giving-away-your-home-to-avoid-care-home-fees-deprivation-of-assets

"Deliberate deprivation of assets occurs when someone gives away assets or income in order to claim either means tested benefits or care home fee funding.

This can take many forms such as

Transferring an asset such as your home to someone else
Selling as asset at an undervalue
Transferring your asset into another asset which will not be taken into account for means testing.
Putting your assets into an irrevocable trust
Local Authorities have wide powers to decide what is and what is not deprivation of assets and can even consider extravagant spending a deprivation of assets in a lot of circumstances."

Thank you very much for the links. Care fees (that I hope we'll never need!) apart, I wonder if this would still be a good thing to make our children's inheritance easier to access.

cushty

Mojisola wrote: »

Don't you think your kids would rather that you were looked after just as well if that became necessary rather than inherit some money?

I'm sure you are right Mojisola, I honestly hadn't thought of it from that point of view - just trying to do what's best for my kids.