Can you create a trust to avoid losing inheritance to a means tested caring costs

svain

Person_one wrote: »

Sorry, but trying to avoid inheritance tax is taking from everybody else as well.

If you're in the fortunate position of receiving a sum of money that you haven't had to work for, that is enough to have required that IHT be paid, you'll be getting a huge chunk of free cash and should have absolutely no complaints about a bit of it being redistributed for the greater good of your fellow human beings!

A typical comment by many that will never be affected by IHT

Gavin83

onlyroz wrote: »

Another option would be for you to provide all care by yourself. However, I can assure you that giving up your job to look after an Alzheimers sufferer with no control over bodily functions won't be much fun. But hey, you'll get to keep all his cash when he pops his clogs.

It's surprising how few people are willing to do this but still want the money and for the state to fund the care. You don't even need to do it their whole life, being a carer for a period of time will also allow for the house to be disregarded. Maybe the OP could consider this.

svain wrote: »

A typical comment by many that will never be affected by IHT

Didn't the Government increase this to around £1m recently?

svain wrote: »

Completely agree ... One of few sensible/helpful posts on this thread.

I thought mine was very useful. Answered the question directly and truthfully. However I don't think the OP is coming back.

svain

Gavin83 wrote: »

It's surprising how few people are willing to do this but still want the money and for the state to fund the care. You don't even need to do it their whole life, being a carer for a period of time will also allow for the house to be disregarded. Maybe the OP could consider this.



Didn't the Government increase this to around £1m recently?



I thought mine was very useful. Answered the question directly and truthfully. However I don't think the OP is coming back.

Point 1 - Having cared for someone (not elderly in this case) until their passing so i can comment on this. It may seem the "honourable" thing to do and im sure many on here would shout about how its the moral/right thing to do .... most probably without any experience of it themselves.

i would urge anyone to think very carefully before taking this on. I took it on as was the wishes of the person and jointly we agreed to give it a go. Its the hardest thing ive ever done, brutally hard at times and relentless ..... but thats not the most difficult part of it. This is eclipsed by how your original connection/relationship with that person can get lost/forgotten. .... However in this specific instance i would not of changed our decision.

Point 2 - I believe 2021 (??) it rises to 1million

Point 3 - Yes, yours was another

Gavin83

svain wrote: »

Point 1 - Having cared for someone (not elderly in this case) until their passing so i can comment on this. It may seem the "honourable" thing to do and im sure many on here would shout about how its the moral/right thing to do .... most probably without any experience of it themselves.

i would urge anyone to think very carefully before taking this on. I took it on as was the wishes of the person and jointly we agreed to give it a go. Its the hardest thing ive ever done, brutally hard at times and relentless ..... but thats not the most difficult part of it. This is eclipsed by how your original connection/relationship with that person can get lost/forgotten. .... However in this specific instance i would not of changed our decision.

Don't get me wrong here I have the utmost respect for anyone who takes it on. I can only imagine how difficult it is and I don't blame people for not being able to do it and placing their relative in a care home. However I don't think you can have your cake and eat it. You either look after your relative and get an inheritance or your relative is looked after in a care home and you lose however much of your inheritance it costs to fund this care. I don't think you should be allowed the best of both worlds and I think the current system is fair. It seems people feel they have a valid claim on an inheritance, despite the fact an inheritance doesn't exist until a person has died.

I used to work in this area so I've fairly strong opinions on the subject and I've seen most scenarios when it comes to this, some extremely ugly.

svain

Gavin83 wrote: »

Don't get me wrong here I have the utmost respect for anyone who takes it on. I can only imagine how difficult it is and I don't blame people for not being able to do it and placing their relative in a care home. However I don't think you can have your cake and eat it. You either look after your relative and get an inheritance or your relative is looked after in a care home and you lose however much of your inheritance it costs to fund this care. I don't think you should be allowed the best of both worlds and I think the current system is fair. It seems people feel they have a valid claim on an inheritance, despite the fact an inheritance doesn't exist until a person has died.

I used to work in this area so I've fairly strong opinions on the subject and I've seen most scenarios when it comes to this, some extremely ugly.

Inheritance is always emotive subject. With the cost of care, how its charged to some, but not others, and the IHT laws, it is only natural for people to look at how best to proceed.
The problem with asking on here is people struggle to be subjective, mainly (imo) because they are envious that someone is benefiting more than them and they react by throwing their "moral" toys out of the pram (none of this aimed at you).
The person asking the question gets judged, yet it can be just as likely the elder looking into this, preferring their assets to be passed down, even at the expense of having better options with regards their care .... and as long as its done correctly, and until its made illegal they have every right to do this.

EdwardB

andrew_hampshire wrote: »

As I understand it; if my father needs to go into a care home he would be means tested and therefore his home would be taken into consideration and at costs of £1000 a week his £270,000 home would be wiped out within 5 years. Is there a legal way that he can leave the house and any other items into a trust for me and my siblings that is activated after his death and avoid local authorities taking this value to cover any costs for his care in later life?

It is a lot worse than you think.

First of all anything you try to do to get rid of it can be undone for up to 7 years back,

He needed to make a gift of it to family 7 years before death or needing a care home.

So having done all the right things, worked till he dropped, paid into the system, with the hope that his children would have a slightly better chance than him he now faces losing it all.

The local authorities are total scumbags in these situations, whether you own a home or not, they basically do everything they can to not pay and if you can't then he goes into the places they decide which are awful.

They take all his income, pension the lot, they and others argue about whether his condition is social or medical so they can pay less.

I think the max they pay is £500 a week, but that includes the moneygrab of state money he was entitled to, you pay the difference. Our bill was £5800 a month less their contribution.

So unless you have a time machine, he could sell the house at market rates, develop a gambling habit and spend the lot. Actually some people do this as a way to hide money, they go to a dozen casinos, get £5k to £10k of chips, do not gamble much and then cash in the chips for cash.

Torry_Quine

EdwardB wrote: »

It is a lot worse than you think.

First of all anything you try to do to get rid of it can be undone for up to 7 years back,

He needed to make a gift of it to family 7 years before death or needing a care home.

So having done all the right things, worked till he dropped, paid into the system, with the hope that his children would have a slightly better chance than him he now faces losing it all.

The local authorities are total scumbags in these situations, whether you own a home or not, they basically do everything they can to not pay and if you can't then he goes into the places they decide which are awful.

They take all his income, pension the lot, they and others argue about whether his condition is social or medical so they can pay less.

I think the max they pay is £500 a week, but that includes the moneygrab of state money he was entitled to, you pay the difference. Our bill was £5800 a month less their contribution.

So unless you have a time machine, he could sell the house at market rates, develop a gambling habit and spend the lot. Actually some people do this as a way to hide money, they go to a dozen casinos, get £5k to £10k of chips, do not gamble much and then cash in the chips for cash.

The seven years is wrong, there is no time limit regarding giving away assets to get free care in a home. Lots of people get confused with the seven years for IHT.

Having the ability to pay for your own care is a privilege many don't have .

Local authorities don't have an endless supply of money and surely people who have the ability to pay should do

EdwardB

7 years is what the local authority said, but hey why not let them roll back to the begining of your mortgage.

Person_one

Torry_Quine wrote: »

The seven years is wrong, there is no time limit regarding giving away assets to get free care in a home. Lots of people get confused with the seven years for IHT.

Having the ability to pay for your own care is a privilege many don't have .

Local authorities don't have an endless supply of money and surely people who have the ability to pay should do

If people want free social care to be available for everybody who needs it, they need to petition the government to raise taxes to fund it, or vote for the political party that promises to do so.

The councils have to meet the needs of everybody in their area with very limited funds and central government is not stepping in to help them. Funding for all kinds of care is a low priority at the moment.

troubleinparadise

EdwardB wrote: »

It is a lot worse than you think.

First of all anything you try to do to get rid of it can be undone for up to 7 years back,

He needed to make a gift of it to family 7 years before death or needing a care home.

So having done all the right things, worked till he dropped, paid into the system, with the hope that his children would have a slightly better chance than him he now faces losing it all.

The local authorities are total scumbags in these situations, whether you own a home or not, they basically do everything they can to not pay and if you can't then he goes into the places they decide which are awful.

They take all his income, pension the lot, they and others argue about whether his condition is social or medical so they can pay less.

I think the max they pay is £500 a week, but that includes the moneygrab of state money he was entitled to, you pay the difference. Our bill was £5800 a month less their contribution.

So unless you have a time machine, he could sell the house at market rates, develop a gambling habit and spend the lot. Actually some people do this as a way to hide money, they go to a dozen casinos, get £5k to £10k of chips, do not gamble much and then cash in the chips for cash.

You mention top-ups, which can allow an element of choice in the LA funded home. This is an additional payment above the LA payment, which cannot be paid by the person in care - the sum has to come from a third-party, usually family. So you can get to pay as well!

http://www.ageuk.org.uk/home-and-care/care-homes/choice-of-accommodation/

LA funding can often just be available for one care home, which may well be many miles from the resident's original home. Demand for places is outstripping supply, and LA homes are closing down. So self-funding can allow an element of choice.

There is also the possibility of NHS continuing healthcare funding to meet care costs, but that is a whole new ball game!

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/193700/NHS_CHC_Public_Information_Leaflet_Final.pdf