Protect our assets

0779mike

I am 70, my wife is 68. Our assets are 2 properties worth £800 and £100k, ISAs worth £70k and a SIPP of £44k. Both properties are Tenants in Common. We wish to protect our assets from Care Home fees and leave our assets equally to our 3 children. One provider has recomemnded wills using Discretionary Trust of Residue, another using Asset Protection Trust or Revocable Life Interest Trust. If you were me which trust would you opt for and why ? Or something else ?

All thoughts welcome.

Is my question in the right part of this  forum ?


Mike

Tucosalamanca

Around £1 million in total value and likely within IHT limits.

I have to ask, why would you wish to deprive yourself of quality care if ever needed?
Having visited some care homes, I would be terrified to end up in a similar situation.

Allowing for care expenses, your three children are still looking at a sizeable inheritance.

You might be willing to sacrifice your own care but would you want your wife to have a similar fate?

Keep_pedalling

So why do you think the rest of us should have to pay for your care if it is needed? You are (like us) in the fortunate position to be able to afford to have care provided when you want and where you want and still leave your children a reasonable inheritance. Frankly you would be bonkers to rely on a cash strapped LA to provide care. I can tell you from experience you will struggle to get it until you get really decrepit, and if you get past that hurdle the next problem will be the lack of choice and the risk of ending up in ‘Over my dead body Grange’

No doubt the people you have been talking to are quoting some nice fat fees for setting up these trusts, but did they mention deliberate deprivation of assets? Did they mention gifts with reservation of benefit? Did they cover the taxation of trusts?

Brie

One might also wonder what you're children would like.  If all they are concerned about is the money well I'd be cutting them out of the will frankly.  If they were, however, concerned about your quality of life then they won't want you to be "protecting" your assets from care home fees.  

chocolatekimmy

Following.  

Having seen a grandparent spend nine years in a care home after a stroke in his seventies I don't blame you for looking into this.  His wife joined him for about 18 months.  

After years of working hard (including serving in WW2), paying tax, living modestly and investing wisely virtually all their assets (house, car, caravan) and savings were wiped out by the time they died. 

Thats not what we sign up for, why should people in that position have to lose everything they've worked for all their lives?

Alphatauri

People always seem to forget that residential care costs include a proportion of council tax, buildings insurance, share of utilities, share of TV licence, broadband etc. as well as food. Things that they are no longer paying for if they are no longer living at home.

Additionally a basic sum NMW £10.42 x 24 hours x 365 days = £91,275 which doesn’t include employer NI & pension contributions and paid leave = the minimum cost of 1:2:1 personal care. 

As a pp pointed out you are currently under the IHT threshold. The only sensible option I am aware of is as joint tenants of your own home you can each leave your share to your DC and give the surviving spouse the right to live in the property for the rest of their life. It is worth putting in clarifications such as who pays for maintenance and the ability to downsize.

What you need is to see a STEP solicitor who can advise you of the pros and cons.

My personal view is that I want the ability to pay for my care and to have a good standard of care as I have seen how poor it can be.

njkmr

Personally I'm with Mike on this one.
He's probably worked hard all his life to build up his estate and to have it taken away in later years is not acceptable.
My mother went into care two years ago and pays most of her pension etc towards the fees and is left with £30 for her own essentials. That's it, so she is still contributing to her care.
Fortunately we found a great care home locally and she is doing great considering her advanced stage of dementia , but the care she gets is fabulous. So it's not the Cost of the care home it's the care it gives that is important.
Mike's money ,house etc should not be taken as another form of tax.
There are people who walzt through life contributing nothing , not 
Saving , not working etc etc who then also get cared for in later life.
Mike has contributed already paying tax I assume so we are not paying for his care he has already paid towards it and no doubt will pay more when it's needed towards his own care. He just doesn't want stripping of his lifes work at the latter end and I think that's fine.
Good luck Mike I hope you find a way that suits your need, and your family benefits from your life's work.
Regards
Rob.

HappyHarry

Sorry - why should I be paying for his care in order to make sure his three children get an inheritance? 

0779mike

I have worked all my life, paid NI and income tax for 50 years and claimed unemployment for just 4 weeks. That is the sum total of state benefits I have had.  We all have to make choices, I chose to live prudently and save my money.

I want my wife and children to control how my assets are spent not the local authority.

I have had some great advice in this forum in the past but I may have posted my question in the wrong place this time.

Marcon

0779mike said:

I am 70, my wife is 68. Our assets are 2 properties worth £800 and £100k, ISAs worth £70k and a SIPP of £44k. Both properties are Tenants in Common. We wish to protect our assets from Care Home fees and leave our assets equally to our 3 children. One provider has recomemnded wills using Discretionary Trust of Residue, another using Asset Protection Trust or Revocable Life Interest Trust. If you were me which trust would you opt for and why ? Or something else ?

All thoughts welcome.

Is my question in the right part of this  forum ?


Mike

I wouldn't bother opting for any of them because they won't work. See https://www.radiotimesmoney.com/retirement/hold-onto-your-house/

Quoting from the above article: '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.'

njkmr said:

Personally I'm with Mike on this one.
He's probably worked hard all his life to build up his estate and to have it taken away in later years is not acceptable.

Why not, when the alternative could be taxpayers having to pick up the cost of ensuring someone's children get an inheritance? 

chocolatekimmy said:

Having seen a grandparent spend nine years in a care home after a stroke in his seventies I don't blame you for looking into this.  His wife joined him for about 18 months.  

After years of working hard (including serving in WW2), paying tax, living modestly and investing wisely virtually all their assets (house, car, caravan) and savings were wiped out by the time they died. 

Thats not what we sign up for, why should people in that position have to lose everything they've worked for all their lives?

You may not think you've 'signed up for it' but providing for your own future/care is going to be the norm for the vast majority of people, so expecting others to cough up is no longer an option.

badmemory

I certainly wouldn't want any family member of mine to be in a cheapo care home unless they have a visitor every single day.  It does seem to make a difference although we all know it shouldn't.  So would one of those children be doing that to earn their third of a million?