Wills and Flexible Family Trust

CliffordSquirrel

My husband and I who are both in our mid 60’s, are in the process of moving and we are interested in setting up a Flexible Family Trust to avoid our home being sold to pay for care fees should we require them later on in life.    Our family home and all our other assets are valued at around £500,000.

Although successive governments have threatened to scotch this practice, as yet no one has.   Does the Forum think it is still worthwhile doing this?

We have two grown up children who are married with children of their own. We made a free will through a trade union last year. Is it advisable while in the process of moving house to button up the whole thing with a new Will and Flexible Family Trust? As our aims are quite straight forward, does anyone have the likely idea of costs?    Our reason for thinking of using a solicitor is to obtain advice so that the Will and Flexible Family Trust can do the best for our son and daughter but that neither of us lose control of our property..

NedS

So how do you plan to fund your care costs, should you require them?

Marcon

CliffordSquirrel said:

My husband and I who are both in our mid 60’s, are in the process of moving and we are interested in setting up a Flexible Family Trust to avoid our home being sold to pay for care fees should we require them later on in life.    Our family home and all our other assets are valued at around £500,000.

Although successive governments have threatened to scotch this practice, as yet no one has.   Does the Forum think it is still worthwhile doing this?

We have two grown up children who are married with children of their own. We made a free will through a trade union last year. Is it advisable while in the process of moving house to button up the whole thing with a new Will and Flexible Family Trust? As our aims are quite straight forward, does anyone have the likely idea of costs?    Our reason for thinking of using a solicitor is to obtain advice so that the Will and Flexible Family Trust can do the best for our son and daughter but that neither of us lose control of our property..

Forget it. Fine and proper for you and your husband to do the best for your offspring, but the taxpayer won't step in to help out:

'Some firms make a lot of money selling schemes to “protect” homes. They cannot work because once you have had that thought of taking some action to get more public money, any scheme is scuppered, even if the home is put into a trust. Save your money. And remember if you, your spouse or partner, or a relative over 60 or severely disabled remains in the property, its value is ignored.'

Source: https://money.radiotimes.com/retirement/hold-onto-your-house/

There are a lot of posts here on just this topic. I do wonder sometimes whether parents have actually stopped to talk to their children (especially adult children) about what the children want for their parents...they may very strongly prefer to see parents with a choice of care options in later life, rather than facing the prospect of having to visit a parent in some ghastly dump which is all that could be afforded. You want the best for them...they probably want the best for you.

xylophone

You would be setting up the trust  with the intention of "obtaining or increasing means tested benefits" - this is deliberate deprivation of assets.

Given the value of your joint estates and the nil rate bands and transferable nil rate bands, IHT planning   would be a  weak justification for a transfer into trust.

https://www.aprilking.co.uk/blog/deprivation-of-assets-guide/

The key consideration here is the intention behind making the transfer. The Local Authority must consider:

• Whether avoiding the care and support charge was a significant motivation;
• The timing of the disposal of the asset. At the point the capital was disposed of could the person have a reasonable expectation of the need for care and support?; and
• Did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?

If the Local Authority believes the asset was given away to ensure it was not included in a means test, it may decide that you have ‘notional capital’ of equivalent value to that of the asset. 

Albermarle

 to avoid our home being sold to pay for care fees should we require them later on in life.  

This is a common worry , but the chance of it happening is rather less likely than you would think. It definitely can happen but not as often as some fearmongering newspapers and articles would make you think .

The majority of older people never go into a care home, and for those that do the average stay is less than two years.

More likely that one or both of you will need some care at home at some point . Normally this would be much less costly than a care home though.

Browntoa

Moved as not pension related

It can and will be classified as "deprivation of assets" and your financial worth calculated as if the asset still exists . Same with cash , small gifts over the years are fine but large sums are a red flag

Keep_pedalling

The reality of your situation is that if one of you needs residential care but the other is still living in the home then the house will be disregarded for self funding calculations. To some this might sound like good news, but unless you have other significant assets it leave you in danger of ending up in the Over my dead body Grange care home.

Splitting the house ownership to tenants in common and leaving the survivor a life interest trust in your share of the property will protect half the value against care costs in most cases. It would only fail if the couple both needed residential care at the same time. Doing this also protects your assets in the event of the survivor getting remarried.