Lifetime trusts and wills

vixen1500

Apologies if this is in the wrong place - please move/advise if so


I am looking to set up a property lifetime trust, a mirror will and a disabled discretionary trust.

Was wondering if anyone can explain the differences between using solicitors and a firm of paralegals?

Any other suggestions/info much appreciated

xylophone

In your position, I would look to instructing a solicitor who was a member of STEP.

https://www.step.org/member-directory

https://www.which.co.uk/money/wills-and-probate/passing-on-your-money/will-trusts-and-lifetime-trusts-aqmf66w4nu5w

Lifetime trusts are often known as property protection trusts or asset protection trusts.

Unlike will trusts, which come into being on death, lifetime trusts are established straight away. Your home is gifted to the trust, which allows you to carry on living in it. The rationale is that if you need residential care at some point in the future, you no longer own a house and can only be assessed on minimal assets.

Anyone considering setting up a lifetime trust for this reason should be aware that a local authority may regard this arrangement as 'deliberate deprivation of assets'. If this is the case, they can assess you as if you still owned the property (and refuse to fund your care).


http://www.renaissancelegal.co.uk/askrl-discretionary-trust-vs-disabled-persons-trust/

vixen1500

xylophone wrote: »

In your position, I would look to instructing a solicitor who was a member of STEP.

https://www.step.org/member-directory

https://www.which.co.uk/money/wills-and-probate/passing-on-your-money/will-trusts-and-lifetime-trusts-aqmf66w4nu5w

Lifetime trusts are often known as property protection trusts or asset protection trusts.

Unlike will trusts, which come into being on death, lifetime trusts are established straight away. Your home is gifted to the trust, which allows you to carry on living in it. The rationale is that if you need residential care at some point in the future, you no longer own a house and can only be assessed on minimal assets.

Anyone considering setting up a lifetime trust for this reason should be aware that a local authority may regard this arrangement as 'deliberate deprivation of assets'. If this is the case, they can assess you as if you still owned the property (and refuse to fund your care).


http://www.renaissancelegal.co.uk/askrl-discretionary-trust-vs-disabled-persons-trust/

Thanks, some interesting facts - which where not explained to me before. Thought it sounded to good to be true , otherwise everyone would do it

Keep_pedalling

Some of us think that leaving it to a LA to decide where we cared for in our most vulnerable years is very bad place to be in, so I would advise you not to listen to anyone wanting to charge you big fat fees to put you in that position.

System

Special rules apply for a trust set up for a disabled person.

I would have thought the local authority care rules would be different ?

sexymax

Hi, I`m also looking to draw up a lifetime trust. I`m 72 years old healthy at present, my property approx 600K. I`ve 2 daughters, one 30 who has just started her 1st mortgage (1st time buyer benefit) The other 26 who still lives with her mother.
One thing is that I`ve been on long term benefits (now Pension Credit)
I`m planning to sell the property and down size, not necessary to generate cash but to repay my daughter 70k (she payed off my mortgage) so Im looking to buy 500k ?`Should I create 1,a trust,or 2, transfer deeds to both daughters ? but does that open up a can of worms?
Also will either of these actions effect my pension credit.

Keep_pedalling

sexymax wrote: »

Hi, I`m also looking to draw up a lifetime trust. I`m 72 years old healthy at present, my property approx 600K. I`ve 2 daughters, one 30 who has just started her 1st mortgage (1st time buyer benefit) The other 26 who still lives with her mother.
One thing is that I`ve been on long term benefits (now Pension Credit)
I`m planning to sell the property and down size, not necessary to generate cash but to repay my daughter 70k (she payed off my mortgage) so Im looking to buy 500k ?`Should I create 1,a trust,or 2, transfer deeds to both daughters ? but does that open up a can of worms?
Also will either of these actions effect my pension credit.

Seems a bit rich claiming government benefits with one hand, and looking to both hang on to those benefits at the same time as setting up a tax avoidance scheme with the other.

If your daughter gifted you the money to pay off your mortgage, then you simply can’t just gift it back, without it being treated as deprivation of assets. If it was a loan it should not cause you an issue, although the remaining £30k will almost certainly take you out of PC territory.

Putting you home into trust and continuing living there is not going to avoid IHT, and and would be foolish to give away your only asset, when you may very well need that asset in later life.

crv1963

If you gift the house to your daughters and they subsequently divorce their share of the marital assets (which will include the house you live in) will go into the marital pot for division between the divorcing partners. You could potentially find yourself evicted in old age as they have to pay a large sum to their former spouse!

AnotherJoe

sexymax wrote: »

Hi, I`m also looking to draw up a lifetime trust.

Why ?

I`m planning to sell the property and down size, not necessary to generate cash but to repay my daughter 70k (she payed off my mortgage) so Im looking to buy 500k ?`Should I create 1,a trust,or 2, transfer deeds to both daughters ? but does that open up a can of worms?
Yes , don't do it.

Just buy the new house and then make sure any property you own at death is left to your daughters in your will without all these shenanigans with trusts and transferring ownership (doing which BTw will land second daughter with punitive extra SDLT when she buys plus mean she isn't eligible for FTB discounts.