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HELP PLEASE!!!! - Parents property being transferred into Trust - GOOD IDEA???
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The leaflet link contained here may help clarify what qualifies (or more importantly, what doesn't) as deprivation of assets. Too easy to run around screaming "deprivation of assets", so best to have an accurate, current, interpretation as opposed to applying it to any occasion of asset disposal.
http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/Seen it all, done it all, can't remember most of it.0 -
Very helpful indeed! It certainly nails the canard that the default postition is that a disposal IS deprivation. Quite the reverse in fact. Likewise that the LA can effectively do as they please. I think it is worth stating that new rules introduced years after a disposal has taken place cannot be applied retrospectively.0
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Ignoring deprivation of assets for a moment. Do your parents have enough income or savings to be able to afford to pay for both of them for several years if they require care. If they don't will they/you be happy for them to be just dumped wherever the local authority is prepared to pay for them to go?0
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These trust's have been successfully challenged by LA if it's purely to hide assets or try to distance themselves from the assets
The only chance of it standing would be if you did it in your 20's not your 60's
I would rather be living in a comfortable and safe home rather than the cheapest the LA can find
I personally only know one person who has ended up needing care in later life , suspect the fear outweighs the reality .
They will be wasting £1000's to set up a trust that is likely to fail when testedEx forum ambassador
Long term forum member0 -
Yorkshireman99 wrote: »I think it is worth stating that new rules introduced years after a disposal has taken place cannot be applied retrospectively.
Why not? A lot of people are now finding that various will trusts which were set up to exploit IHT rules of ten to twenty years ago are either expensive or inefficient for today's rules, and there isn't the slightest suggestion that the tax man is going to say "oh, OK, as you were: because you set up a trust in 1998, you can have your estate valued as though the rules of 1998 were still in force". I don't see any reason to believe that historic transactions are by definition exempt from consideration as deprivation of assets. If you seek funded care in year X, your finances will be assessed by the rules prevailing in year X, and that might include transactions which are obviously artificial (because let's face, all these schemes are completely artificial).0 -
For example, suppose a local authority were to argue that the mere fact that you had entered into an artificial (and expensive) transaction whose effect was to evade care costs was of itself evidence that you were expecting to need to pay care costs? Yes, it's almost exactly Catch 22. Fancy your chances in a court?0
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securityguy wrote: »For example, suppose a local authority were to argue that the mere fact that you had entered into an artificial (and expensive) transaction whose effect was to evade care costs was of itself evidence that you were expecting to need to pay care costs? Yes, it's almost exactly Catch 22. Fancy your chances in a court?0
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The company involved doesn't seem to have any inhouse solicitors and are paralegals.
Will the company become the Trustee? and if so, does this mean my parents will not solely own their property?
1) Don't know, you need to ask them or show us the trust deed
2) If they transfer their property into trust they won't own it at all, the trust will own it.
You may find this thread of interest - I have no idea whether the same company is involved but it illustrates the potential issues of having your house owned by a trust where an unregulated company is the trustee.
Ask your parents why they don't just give you the house. The most likely honest answer is "because although we love our daughter, we can't be certain that you won't evict us, sell the house and run off to Dubai, leaving us homeless. So you'll have to wait until we're dead." However, the same is true if they give it into trust - they don't own it anymore and the trustees in theory should be evicting them if they don't pay rent at market rate. If the idea is that by giving it into trust they can keep all the advantages of owning the property without actually owning it, then it's a transparent sham, and none of the claimed inheritance tax or care costs advantages are likely to be effective.0 -
Yorkshireman99 wrote: »What I am saying is there is a general legal presumption against retrospective legislation. For example if someone in good health gives away funds with a view to reducing IHT after seven years that cannot be regarded as DOA and legislation cannot subsequently be introduced to make them DOA.
DoA doesn't arise from legislation, it arises from the statutory guidance for the Care Act 2014. To quote from the relevant document (Annex B), in its entirety, that reads (at 29(c)):
"29) "Notional capital may be capital which: ... (c) the person has deprived themselves of in order to reduce the amount of charge they have to pay for their care"
That's it. After that, the mechanisms by which the decision is taken are (in the case of the DSS) in the Advice for Decision Making, and it's likely LAs would follow a similar process. But that's not legislation, not even secondary legislation. And if we dive in deep and look at Chapter H1 on Capital, we find at H1815 (and I accept this is the wording for UC, but I'd take a lot of convincing it would be radically different for other benefits) "The meaning of deprive is not a question of law and should be given its normal every day meaning. So claimants have deprived themselves of capital if they no longer have it even if they use it to get other capital2 or personal possessions." (my
emphasis).
The decisions of a decision maker are subject to appeal, but they hold all the cards. They have two choices if they decide your transaction is dubious: they can decide that you have the capital, even though you claim you don't (H1818). H1816, on "Onus of proof" says "People have to show they no longer have capital". Or they can decide that you don't have it but you deliberately deprived yourself of it (with the rather vague H1844 "The DM should consider the date claimants or partners deprived themselves of capital. Such a fact is more relevant if deprivation is near to the date of the claim or the date the claimant’s circumstances change".
That's it. The rest of the timings, policies and so on are just that, policies, and as they don't arise from law talk about retrospective legislation is moot.
If someone has a copy of an LA equivalent of the ADM, that would be absolutely fascinating. But for deprivation of assets for the purposes of UC, there simply isn't the certainty that people are claiming. There's guidance, and considerable "if it walks like a duck, it's a duck" latitude for decision makers. I'm not even completely convinced by the "if the transaction was for the purpose of IHT then it can't be DoA" as an absolute rule: "H1825 Getting UC or more UC may not be the claimant's or partner's predominant purpose but it must be a significant one".
We just don't know. It's a ten year bet on LA policy.0 -
Any deprivation of assets has to have a statutory basis under UK and European law. To suggest otherwise is absurd. Your repeated assertion that local authorities have almost infinite wriggle room to impose what ever rules they like is risible. The Statutory guidance means just that i.e. the LA has to follow it. Of course there is some degree of discretion but that is balanced by the need to be fair and reasonable. The Age Concern paper gives a very good outline of what is, and is not, allowed. It simply does not support your assertions. That, coupled with the independent professional advice from two separate sources tells me that you are just wrong. Certainly those three sources IMHO override anything from an unknown person such as yourself on an internet forum.0
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