Placing house in a trust

kuratowski

sevenhills said:

They would go back 20 years, a ridiculous statement.

Is it ridiculous?  From https://www.aprilking.co.uk/blog/deprivation-of-assets-guide/:

Note that Yule v South Lanarkshire Council [1999] 1 CCLR 546 establishes there is no time limit on how far back Local Authorities can look when deciding whether a person has deliberately deprived themselves of assets to avoid residential care. So for example, if you transfer your home to your child or children when you are in your forties (although still fit and healthy) but continue to live in the property until your sixties (when you need care), there is a high risk the Local Authority will still regard this as deliberate deprivation of assets

Pollycat

Emmia said:

maisie_cat said:

sevenhills said:

pensionpawn said:

This is true and is a common misconception. It took me ages to get this across to a well educated family member who's wife used to run a care home (so I thought they would have known).

So educate people, if there isn't a 7 year rule, if I gift my house to my children 20 years before death. Would that be ok, maybe 10 years would be ok too?

what happens if one of your children gets divorced or goes bankrupt? you'll be homeless

What if you (seriously) fall out with your child, and they sell the house / evict you???

If your child owns the house you live in and gets divorced, wouldn't this house (that you've given to someone else to get out of paying care home fees) form part of the divorce settlement?

The ex-husband or ex-wife might do very nicely out of that.

I don't know much about bankruptcy but it seems logical that if you have 2 houses (the one you live in and the one your parent gave you to get out of paying care home fees), at least one might have to be sold. And that will probably be the one you are living in and used to own, before you gave it away to get out of paying care home fees.

And I'm sure there have been cases of parents and children falling out.

And if it's bad enough, I guess that child could sell the house that you've given to them to get out of paying care home fees and make you homeless.

Personally, if I'm unlucky enough to need to go into the care system I'd want to spend my days in a nice place using the money I've earned throughout my lifetime to pay for that care, rather than a place that the council are willing to pay for because I've given away my biggest asset to avoid paying for care.

I do appreciate that some care homes that are within the council financial limit are well-run places.

sevenhills

kuratowski said:

 how far back Local Authorities can look when deciding whether a person has deliberately deprived themselves of assets

There would be no documentation going back 10+ years, would they have access to medical records, probably not. Your link is from a legal firm drumming up lucrative work, not an unbiased source.

Surely it would be better to have a 6/7 year rule, then people will understand how things work, legally. Is there a 6 year rule about keeping legal paperwork?

p00hsticks

sevenhills said:

kuratowski said:

 how far back Local Authorities can look when deciding whether a person has deliberately deprived themselves of assets

There would be no documentation going back 10+ years, would they have access to medical records, probably not. Your link is from a legal firm drumming up lucrative work, not an unbiased source.

Surely it would be better to have a 6/7 year rule, then people will understand how things work, legally. Is there a 6 year rule about keeping legal paperwork?

If you need to go into care, it will be immediately apparent that you are currently living in a home now owned by your children, and land registry records will show that it was transferred from your name to your childrens in the past. If the Local Authority turn round and say 'unless you can demonstrate another good reason why you did this, we're gonig to assume you did this to avoid care fees and so are not going to fund you', what are you going to do ?

In the meantime you're racking up a CGT bill for your kids, have prevented them from making use of any first time buyer status they might have had, have jeopardised your own situation if they were to get divorced or go bankrupt, and have failed to avoid either care home fees or inheritance tax. Where is the plus side in doing it ? 

noh

sevenhills said:

kuratowski said:

 how far back Local Authorities can look when deciding whether a person has deliberately deprived themselves of assets

There would be no documentation going back 10+ years, would they have access to medical records, probably not. Your link is from a legal firm drumming up lucrative work, not an unbiased source.

Surely it would be better to have a 6/7 year rule, then people will understand how things work, legally. Is there a 6 year rule about keeping legal paperwork?

Link to Age UK info on the subject.
https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/
As p00hsticks said above the transfer of the house would be documented by the land registry.
The local authority would also ask as part of your application for funding if you had previously owned a property.

kuratowski

sevenhills said:

Your link is from a legal firm drumming up lucrative work, not an unbiased source.

If you don't trust the blog, google the case and read the court's judgment for yourself.

Pollycat

I can confirm that the council (in our case County Council) ask some searching questions about finances when someone needs to go into care.

Both my Mum and Dad went into care, Dad was self funding at the time, Mum was funded by the council.

Dad's interview lasted several hours, Mum's was longer.

I really wouldn't have liked to have to explain that Mum & Dad had made the decision to sign their house over to me (to avoid having to pay care home fees).

sevenhills

p00hsticks said:

In the meantime you're racking up a CGT bill for your kids, have prevented them from making use of any first time buyer status they might have had, have jeopardised your own situation if they were to get divorced or go bankrupt, and have failed to avoid either care home fees or inheritance tax. Where is the plus side in doing it ? 

People could use any old excuse, I had credit card debts or gambling debts, so my kids bought the house from me 5+ years ago. People touting putting a home into a trust, or the example of the Goldsmiths. I believe rich and poorer people should be treated the same.

I dont know how common it is, my nieces partner has his mums home in his name. He does live there on and off, so I doubt anyone can prove why/how ownership changed hands.

It's my sister that is worrying about this, because our mother ended up in care. I already knew there would be some issues. My dad sold his house around 10 years before his death and went in rented flats for older people. That will probably be my chosen path.

Thanks for everyones input.

eskbanker

sevenhills said:
I believe rich and poorer people should be treated the same.

Means-testing is a sound principle to ensure that financial assistance is deployed to those who need it - it would clearly be possible to eliminate it and have everyone's later life care funded by the state, whether or not they could afford to pay for it, but that would entail an additional taxation burden for all for the benefit of the richer, which is hardly going to be a vote-winner....

justwhat

eskbanker said:

sevenhills said:
I believe rich and poorer people should be treated the same.

Means-testing is a sound principle to ensure that financial assistance is deployed to those who need it - it would clearly be possible to eliminate it and have everyone's later life care funded by the state, whether or not they could afford to pay for it, but that would entail an additional taxation burden for all for the benefit of the richer, which is hardly going to be a vote-winner....

Means-testing is a sound principle - Is it? 
The benefits system penalizes savers and  and people that are careful with money.  Defiantly at the age of retirement or if you have a long term disability  you are better off have no saving at all. (unless the savings effect your lifestyle)
SOME  of the benefits that people receive during there lifetime are generous and they are sometime not needed to "survive"
Saving for a rainy day is a minds set. 
You need to manage savings and dispose of it in later life.