Placing a home into a trust as part of will planning

philiusfogwakey

I'm not sure if this is the correct group or not, as we have no idea where to start. 

My mother-in-law would like to place her home into a trust for her 4 grandchildren so that she doesn't lose it if her health continues to deteriorate, and for it to be their inheritance gift when she dies. The 4 grandchildren are all under 10 and equally split between my family and my brother-in-law's family (they aren't aware at the moment that this is her intention as they live some distance away).

Where do we start in helping her do this, as she will expect my wife and I to get the wheels in motion and sort this out for her? Do we need a financial advisor, or a specific type of solicitor? 

I'm nervous of both tbh, due to poor experiences in the past, so we don't have any local/family firms who we would use automatically - where could we look for reliable/honest recommendations?

Any advice would be much appreciated, as we have noticed a significant change in get health whilst she has been staying with us. 

Many thanks.

KxMx

This will be seen by the authorities as deprivation of assets- especially as her health is failing. 
They will refuse to fund any care needed and she will be treated as though she still has the financial asset. Leaving you all in a terrible position. 

https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/ 

The best thing you and your wife can do is be honest with her and explain what a terrible idea it is. 

Assets grant choice in terms of when and where care needs are met. She is in a very fortunate position to have those choices. 

Keep_pedalling

That would be deliberate deprivation of assets and is frankly a non starter. Does she have other significant assets?

Does she have a will and lasting power of attorney in place? If not that should be her main priority.

Linton

philiusfogwakey said:

I'm not sure if this is the correct group or not, as we have no idea where to start. 

My mother-in-law would like to place her home into a trust for her 4 grandchildren so that she doesn't lose it if her health continues to deteriorate, and for it to be their inheritance gift when she dies. The 4 grandchildren are all under 10 and equally split between my family and my brother-in-law's family (they aren't aware at the moment that this is her intention as they live some distance away).

Where do we start in helping her do this, as she will expect my wife and I to get the wheels in motion and sort this out for her? Do we need a financial advisor, or a specific type of solicitor? 

I'm nervous of both tbh, due to poor experiences in the past, so we don't have any local/family firms who we would use automatically - where could we look for reliable/honest recommendations?

Any advice would be much appreciated, as we have noticed a significant change in get health whilst she has been staying with us. 

Many thanks.

This could be a very foolish thing to do.  If the local council are asked to pay for care fees for someone and they believe arrangements were made to hide or give away their assets the council can regard those assets as still belonging to the person and refuse to pay for the care.   See "Deprivation of assets", here for example.  This could leave the family in a difficult position.

Another aspect is that if the council pay they could well go for the cheapest care available rather than the most confortable, appropriate, or closest to family.  Is that what the family wants for MIL or would they prefer that her money was used to make her final years as happy as possible?

KxMx

When care happens is equally as important - a friends granddad with dementia (she has POA) was kept at home for 3 years with 4 daily care visits (and the authorities pressured the family to call in on top). 
Many professionals were involved and all said he needed a care home, apart from those who would have to pay. 
The gentleman had a bad fall and the Hospital refused discharge to anywhere but a care home. 
He's not even safe now- regular assessments are made as to whether he could manage in sheltered housing - one went quite far before my friend managed to stop it. 

p00hsticks

philiusfogwakey said:

Any advice would be much appreciated, as we have noticed a significant change in get health whilst she has been staying with us. 

That would suggest that it might be too late - with a significant decline in health, then attempting to move assets out of the reach of the local authority with the express purpose of avoiding paying for care may well be considered a 'deprivation of assets', and any financial assessment will be made on the grounds that your mother still has the asset. 

Brie

Health trumps inheritance on this so as others say it's not a good thing to even attempt as it's likely to go wrong.  

Why not suggest an alternative?  help her sell the place now and move into a nice place for her to be perhaps?  Or use the proceeds to make your place more accessible for her if she's going to be there for some time?  Neither of those would be considered deprivation of assets as both are intended to keep her out of council funded care of whatever sort.  Keep in mind that a care home costs well in excess of £1k a week currently, particularly in the south and places like London.  So a £500k home when sold might last maybe 4 years?  Less if the place is more than basic.

She would probably also be ok dropping a bit of money (how much???) into a JISA for each of the grandkids and continue to contribute to that for birthdays etc to build up a bit of a pot for them when they need it for buying a home or getting further education.  

She could also take them all on holiday to someplace special - to build a memory for them of their gran and to do so while she can enjoy it too.

Meanwhile if she is needing assistance has she applied for Attendance Allowance?  And possibly one of you could apply for Carer's Allowance as well?  

Keep_pedalling

There is nothing to stop her actually doing this, but you would be insane to take on being a trustee of such a trust. If she ends up needing residential care then deprivation of assets will come into play and you are going to be looking at trying to undoing the trust to pay her care fees, If she never needs care you are going to have to managing what is likely to be a discretionary trust which is going to be time consuming and could lead to some major taxation issues to deal with. 

Don’t be bullied into doing this, you will certainly regret it if you do. 

Olinda99

it won't work and she will still be liable for her care costs

If it worked don't you think everyone would do.it ?

poseidon1

philiusfogwakey said:

I'm not sure if this is the correct group or not, as we have no idea where to start. 

My mother-in-law would like to place her home into a trust for her 4 grandchildren so that she doesn't lose it if her health continues to deteriorate, and for it to be their inheritance gift when she dies. The 4 grandchildren are all under 10 and equally split between my family and my brother-in-law's family (they aren't aware at the moment that this is her intention as they live some distance away).

Where do we start in helping her do this, as she will expect my wife and I to get the wheels in motion and sort this out for her? Do we need a financial advisor, or a specific type of solicitor? 

I'm nervous of both tbh, due to poor experiences in the past, so we don't have any local/family firms who we would use automatically - where could we look for reliable/honest recommendations?

Any advice would be much appreciated, as we have noticed a significant change in get health whilst she has been staying with us. 

Many thanks.

I concur, with all the comments that it would highly inadvisable for your MIL to set up a lifetime trust of the house for the apparent purpose of avoiding erosion of her estate by care home fees.

However, if she is absolutely set on the grandchildren inheriting the house ( or what is left of her estate ) on death, then she should certainly get a will drawn up to that effect. Given the ages of the various children the form of trust could either be an 18 -25  settlement or fully Discretionary if she wants to include any future unborn children.

Such a will really needs an experienced practitioner so recourse should be made to the Society of Trust and Estate Practitioners ( STEP) directory, to source a solicitor in your local area - see link below.

https://www.step.org/about-step/public?gad_source=1&gclid=Cj0KCQiAvbm7BhC5ARIsAFjwNHugSqVhaQ3Kd5SpaWkQGtorCX5DQXoPjy6chW8Eoe3v2t387te0zHwaAk5DEALw_wcB

Please note Discretionary trusts can be complex and potentially expensive to administer if invested in conventional income producing stocks/shares/gilts/OEICS. To minimise complexity and running costs consideration could therefore  be given to investing in single premium life company investment bonds, an option to be explored with a suitably qualified IFA.

Marcon

philiusfogwakey said:

Where do we start in helping her do this, as she will expect my wife and I to get the wheels in motion and sort this out for her? Do we need a financial advisor, or a specific type of solicitor? 

You don't, whatever she might expect. See https://www.radiotimesmoney.com/retirement/a-question-of-trust/ and note the final paragraph:

Trusts can work for very wealthy people. But if your main asset is your home and you have savings even in six figures they are generally a waste of money. The Society of Trust and Estate Practitioners (STEP) is a trustworthy organisation who can advise (step.org).