Worried for parents about asset protection trust

phillw

Albermarle said:

You can do them yourself on line @ £82 each, although you still have to print them off and get them signed.  It is a bit of a faff, as you have to get a lot of different signatures, but having LPA's in place can save a LOT of problems farther down the line.

It depends on how you cost your time and how much research and effort you want to put into it, compared to paying someone to do it for you. Same as people who pay for their windows to be washed, cars to be serviced, etc.

But I wouldn't get my Will or LPA from someone who would advise to setup a trust to avoid care home fees.

Possible outcomes
1. They don't need care, they wasted four grand.
2. They need care and the council challenges the trust and wins, they wasted four grand.
3. They need care, the council funds it and they are miserable so that you can inherit the property.

They would be better off using all their savings and equity to pay for private care.

jimjames

Sagwala said:

Keep_pedalling said:

If we are talking about life interest trusts being put in place on the first death then that is a quite common and reasonable approach to protect an inheritance from second marriages and at the same time provide security to the survivor, but the price being charged for such a service is a rip off.

If the proposal is to put everything thing in trust now you should put a stop tho that before the trust documents are signed. Deliberate deprivation of assets come into play for such care cost avoidance schemes so they will be just chucking their money away. I would also ask them if they are happy to risk ending up in over my dead body grange just so they can leave more money when they are dead.

I presume this was a home visit from a will writing company sales person rather than a local solicitor?

It was a home visit yes from a local will writing company. Is there any way of getting their money back. 

First step is to contact the company to ask for their money back. How did they pay? You may want to look at this

https://www.citizensadvice.org.uk/consumer/changed-your-mind/cancelling-a-service-youve-arranged/

I guess it all depends how reputable the company are. If they are operating on the verge of legality then they are likely to be far more reluctant to refund than one that is long established and bona fide. Time is of the essence though, the sooner they cancel the better to avoid the company actually starting any work that could be deemed chargeable.

Keep_pedalling

Sagwala said:

Keep_pedalling said:

If we are talking about life interest trusts being put in place on the first death then that is a quite common and reasonable approach to protect an inheritance from second marriages and at the same time provide security to the survivor, but the price being charged for such a service is a rip off.

If the proposal is to put everything thing in trust now you should put a stop tho that before the trust documents are signed. Deliberate deprivation of assets come into play for such care cost avoidance schemes so they will be just chucking their money away. I would also ask them if they are happy to risk ending up in over my dead body grange just so they can leave more money when they are dead.

I presume this was a home visit from a will writing company sales person rather than a local solicitor?

It was a home visit yes from a local will writing company. Is there any way of getting their money back. 

Your parents should call this company to tell them that after consulting with their family they do not believe the advice to put their assets in trust is in their best interests and that they no longer wish to proceed with the trust. if the visit was very recently and no work has been done then cancel everything else as well. Might be advisable to be on hand when the call is made. 

dunstonh

As a brief background, if both my parents were to shuffle off tomorrow we are taking property circa 300k, money and assets circa 200k max 500k - all of this would be a straight down the middle split with my sister. 

So, in very simple terms, there is a £1m IHT allowance available in this scenario.  So, no IHT to pay.

I have just visited to find out they have paid £4500 for the company to set up a trust between the 4 of us which protects all of the above from being touched by care costs in the future, and also to prevent losing the bloodline inheritance in the event of a divorce. Also to setup Power of Attorney in the event of them losing capacity. 

These types of companies are rife at the moment and play to all the fears that older people have.   I have managed to catch a few of these early enough to prevent my clients from paying money out unnecessarily.    

The vast majority of the population have no need for such things.   It can be justifiable to do some of the things mentioned but even then, it is a marginal justification.

Most of those operating in our area are not solicitors or have any legal training or standing.    One I have had a run-in with was the spouse of a solicitor.    Anyone going to the solicitor was directed to the spouse who was set up on a separate limited company that was nothing to do with the solicitor. Even though they thought they were using the solicitor.   

They often get to double dip as well by naming themselves or the linked solicitor as the executor and you typically see fees of 2-5% of the estate value for the work.

Albermarle

phillw said:

Albermarle said:

You can do them yourself on line @ £82 each, although you still have to print them off and get them signed.  It is a bit of a faff, as you have to get a lot of different signatures, but having LPA's in place can save a LOT of problems farther down the line.

It depends on how you cost your time and how much research and effort you want to put into it, compared to paying someone to do it for you. Same as people who pay for their windows to be washed, cars to be serviced, etc.

But I wouldn't get my Will or LPA from someone who would advise to setup a trust to avoid care home fees.

Possible outcomes
1. They don't need care, they wasted four grand.
2. They need care and the council challenges the trust and wins, they wasted four grand.
3. They need care, the council funds it and they are miserable so that you can inherit the property.

They would be better off using all their savings and equity to pay for private care.

4. Ongoing expense of running the trusts and dealing with HMRC /potential tax payments.

Sagwala

Thankyou for all of your valued comments.

We have made a call today and started the cancellation process.

The company seem very amicable and have had emails to confirm that when the letter arrives and the cancellation slip it will all be cancelled. 

The salesman that came to their home also called Mom to ask if everything was OK and confirm the 14 day cancellation period.

We have cancelled everything and will follow good advice on here to set up a simple will and LPA to cover their needs. 

Obviously the proof of the pudding will be a successful refund in full, but so far looking positive, ........ Phew. Thankyou for all your information and experience. 

jimjames

That's great news to hear (so far at least!)

Keep_pedalling

Great news, I would help them them to do their LPAs (might be a good idea to do yours at the same time if you don’t already have them in place), and find a local solicitor to make their wills.

Sagwala

Keep_pedalling said:

Great news, I would help them them to do their LPAs (might be a good idea to do yours at the same time if you don’t already have them in place), and find a local solicitor to make their wills.

Definitely will do thankyou. 

gonboating

couple of points worth mentioning about LPA's
If you can fill in a self assessment tax return you can prepare a set of LPA's Set up an account (NB check its with www.gov not the spivs who buy top ranking) complete the form online and pay and print. the key once printed is to make sure the various signatories are in the right day order. The bore is you then have to post it to birmingham for someone to take 20 weeks to check.
Not for the OP I think but if the donor is on most means tested benefits then the fees are waived in full or part.
Or you can pay someone to do it for you but don't let them upsell you.