Making Will, PoA and Trust?

missile

Hi,

I need to review my will following my wife's passing.

I am 74 with no debt. I own property £350,00 & £150,000 cash / investments. I intend to leave all to my two my two sons who would be the executors.

I think I should create PoA with my two sons as executors.

It has been suggested I create trust to avoid care home fees.

I think I understand the pros but I would appreciate your comments on any negative issues / things I should be aware of.

Many Thanks :-)

sheenas

It's classed as deliberate deprivation of assets. Local authorities have the power to investigate if you transferred your home or money into a trust (or gifted it) to intentionally avoid care fees. There is no limit for care home assessments councils can look back 10, 15, or more years if they suspect the primary purpose of the transfer was to dodge care costs. If proven, the council can treat you as if you still own the asset and refuse to fund your care

Albermarle

https://forums.moneysavingexpert.com/discussion/6688276/making-will-poa-and-trust

I think I should create PoA with my two sons as executors

Just for clarity, only wills have executors. Power of Attorney is a different item altogether, and is effective whilst you are still alive.

It has been suggested I create trust to avoid care home fees.

Who has suggested this? It is bad advice.

Firstly trusts are expensive to set up, and complicated and expensive to administer. Then if the local authority thinks that you have set up the trust to avoid care fees, they can just ignore it anyway.

Even if it did work, would you be happy with the basic level of care/home offered by the council, when you could afford much better? Would your sons be happy to see you potentially deprived of good quality care, just so they would get a bigger inheritance?

You may well probably never need any expensive care anyway.

KxMx

Who do you think should pay for your care then, if you need it?

Are you aware of the standard of care that those who can't self fund get?

Especially if you need a care home and it's not just about where you end up, but when.

My friend is LPA for her relative (A) and they had a 3 year battle to get A into a care home. Every other professional (many agencies by the end) who was involved said A needed residential care, but the LA refused.

All they did was up A's care visits to the maximum 4 per day and pressure the family to call in on top.

Years of stress for relatives, years of A living in an unsafe situation, and they only agreed to fund residential care after A had a nasty fall whereby the Hospital refused to send A home.

Do you want that kind of situation for yourself & your family?

missile

Thanks for your comments,

"Who has suggested this? It is bad advice." I contacted Thomas Bradley Legal who offer free will writing service. The advisor suggested I create PoA and "Family Protection Trust" at the same time. Fortunately, I did not sign up and said I would need time to consider and discuss with my sons.

As you suggested, I would rather choose care at home or pick my own care home if and when I need it.

kermchem

Normal advice here is to see a solicitor about a will not a will writing service who sound as though they might make money out of running their unnecessary trust.
PoA you can do yourself or with help of sons.
How was your late wife’s estate distributed?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82183000#Comment_82183000

That is one way a free will writing firm will make money, by suggesting expensive options like trusts, which in most cases are unsuitable anyway.

PoA is a bit different in that it is very good idea to set these up. You can pay a solicitor to help you with them, but you can DIY them for about £90 for the fee.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82183000#Comment_82183000

As anticipated the firm is not a law firm ( far from it). They are just one of a regrettably large number of unregulated and for most part unqualified will writing firms preying on the general public's lack of awareness.

You should note in the fine print of their webpage ( where they hope most people will not notice) is the following disclaimer :

Thomas Bradley Legal Ltd and Thomas Bradley & Co (Scotland) Ltd are not regulated by the Law Society. Depending on the specific service you have engaged us for, we may collaborate with third-party partners, including solicitor firms, financial services firms, and accountancy firms

As regards the family protection trust, that is an extremely bad idea for the simple reason that once an asset exceeding your nil rate band is gifted into such a lifetime trust, the excess above £325k is taxable at 20% lifetime rates of IHT. Worse still, every 10th anniversary of the trust when the trust asset is revalued, any excess value above the nil rate band is taxed at 6%.

In your case a trust of the house alone would trigger an immediate IHT bill of £5,000, a tax exposure presumably glossed over by the firm.

What is particularly egregious about this reccomendation, is that it seems to follow the playbook of 20, 000 similar trusts set up by the Scottish firm McClure ( Google McClure trust scandal), where the terrible financial fallout for the families involved continues to this day.

Strongly reccomend you kick this firm to the kerb, and find yourself a qualified solicitor ASAP.

Keep_pedalling

Forget the trust, but the you should definitely get lasting powers of attorney in place. These can be done yourself on line. LPA application

For your will you really should use a local solicitor, who will cover off all the what if situations you have probably not thought of.

What is your marital status? I ask because if you are divorced or were never married you net worth is right on the boarder of IHT territory. If you are widowed however you are well inside it.

missile

Thanks to all who have commented. Please be advised:

"PoA you can do yourself or with help of sons." In Scotland, a solicitor or medical doctor must interview you and sign your document to show you understand the decision you are making.
"How was your late wife’s estate distributed?" I was executor assisted by my solicitor.

My wife and I did have PoA where we were each others attorney.

I do have a will prepared by my solicitor. There are some items which no longer relevant.

missile

https://forums.moneysavingexpert.com/discussion/comment/82183170#Comment_82183170

As I understand it. My beneficiaries would not be liable for IHT? The critical advantage for widows is the transferable nil rate band. If your late spouse didn’t fully use their £325,000 nil rate band (which is common when everything passes to the surviving spouse), the unused percentage transfers to you. In most cases, this means you have a combined nil rate band of up to £650,000. If the Residence Nil Rate Band also applies, a widow passing her home to her children could have a total IHT-free allowance of up to £1,000,000 (£325,000 NRB + £175,000 RNRB of your own, plus the transferred amounts from your spouse). Widow's Guide to Inheritance Tax UK 2025