April King

Tom99

SeniorSam wrote: »

Tom99, It really depends on the gamble that long term care will not be needed for the second to die, as all of the estate (bar PET's) could be needed to meet that cost and possibly nothing left for the family.

But surely the 50% of the house with a lifetime right to occupy cannot be use for care home fees anyway (which is the main reason for the trust) whether 50% is worth £300k or £600k

Yorkshireman99

Tom99 wrote: »

But surely the 50% of the house with a lifetime right to occupy cannot be use for care home fees anyway (which is the main reason for the trust) whether 50% is worth £300k or £600k

There is a potential problem with these trusts. I don’t know if this has been tested in court, but could be seen as deliberate deprivation of assets as their main purpose seems to be just that. IMHO it is a huge loophole that has not been closed. Constructive comments welcome.

AnotherJoe

The main purpose can be to ensure than the beneficiaries are not dispossessed by a future will from the surviving spouse, classically the "gold digger" new wife or husband. I had this discussion with my solicitor last week as we were undoing this for our new will and her comment was all regards this was the main purpose of it.

Also AIUI if this is being done before there is any "reasonable expectation" of care home fees being needed then you are OK. That along with its main purpose being the above reason probably makes it OK as long as both are in good health.

Browntoa

Interesting read , can be declared as deprivation of assets and reversed.

https://www.roydswithyking.com/care-home-fees-deliberate-deprivation-assets-word-warning/

Browntoa

And I personally know of someone who gifted property to her daughter who sold the property 2 years later leaving her homeless.

nom_de_plume

Browntoa wrote: »

Interesting read , can be declared as deprivation of assets and reversed.

https://www.roydswithyking.com/care-home-fees-deliberate-deprivation-assets-word-warning/

That example appeared to relate to the whole property rather than 50% so perhaps not unsurprising.

Browntoa

Property jointly owned is a mandatory disregard for care fee's if the other partner still lives there anyway , so it's only an issue for a surviving partner. No charge on the property is made if it's a mandatory disregard

getmore4less

Yorkshireman99 wrote: »

There is a potential problem with these trusts. I don’t know if this has been tested in court, but could be seen as deliberate deprivation of assets as their main purpose seems to be just that. IMHO it is a huge loophole that has not been closed. Constructive comments welcome.

No deprivation the doner is dead.

getmore4less

SeniorSam wrote: »

IHT kicks in on second death but are you saying that the nil rate bands of both still applies?

In which case, should caution be applied to limit the value of that part of the house gifted in Trust to the children on first death to keep within the nil rate band and to avoid exceeding the allowance of both on second death?

No.

Any other option(other than giving it to the spouse or charity) involves using up the nil rate band on first death and if that runs out IHT.

getmore4less

Browntoa wrote: »

Interesting read , can be declared as deprivation of assets and reversed.

https://www.roydswithyking.com/care-home-fees-deliberate-deprivation-assets-word-warning/

Does not apply to tenants in common and life interests