Now You Can Help Protect Against Your Home Being Sold
TERM CARE FEES
It is not surprising that few
of us have considered what the effect might be on our savings and
investments, or even our home, if we ever needed residential care
later in life.
people assume that we will pass on our assets to our children or other
relatives in due course, yet this may not always be the case unless
careful arrangements have been made to protect our assets from being
taken to pay care home fees.
to advances in medical science and a general improvement in health
and fitness, everybody is living longer. Even with this in mind, it
is highly probable that one or even both partners in a household will
require long-term residential care at some point in their lives. This
is particularly so given that it is becoming much less common for
elderly parents to move in with their children these days.
recent years, it has become increasingly apparent that the State will
only provide for those with little or no savings or assets. Everyone
else will be expected to pay at least part, if not all, of his or
her own costs. Currently, anyone with assets in excess of £22,500
for 2009 in Scotland (this includes the family home) would not be
eligible for any state help with their residential care fees.
The net result is that anyone
who owns their own home is unlikely to receive any assistance even
though they do not have large amounts of cash assets.
Even if you don't have the cash
readily available, the Department of Social Security can still place
a charge against the family home, which allows them to recover the
moneys owing when the property is eventually sold.
Average residential care fees
start in the region of £600 per week so it is clear how quickly
assets can be eroded. The DSS has often become the sole outright owner
of the family home after the death of an elderly parent who had been
living in a nursing home. But there is a solution.
THE PROPERTY TRUST
'Property Trust' is based around three basic elements: the basis on
which you own your property, the Trust terms, and your Wills, which
contain the Trust instrument.
The Property trust can only be
created whilst both partners remain alive and the property must be
owned as Tenants in Common. The Trust instrument is then included
in both Wills but does not come into force until after the death of
Upon the first death their share
of the property, typically 50%, is placed into the Trust to be administered
by the Trustees nominated in the Will, and this usually includes the
surviving spouse. When we make a Will, it also specifies who is to
be the ultimate beneficiary of this share in the property and the
Trustees duty is to protect the property for the benefit of the beneficiaries.
The surviving spouse, under the
terms of the Trust, has the right to remain living in the property
for the rest of their life. On the death of the second spouse the
trust comes to an end and the property passes absolutely to the beneficiaries.
surviving partner does not own the deceased's share of the property.
If that person then goes into residential care then only his/her share
in the house can be included as part of the assessment of their contribution
to care costs.
The surviving partner is given
a 'Life Interest' in the deceased's share of the property, so they
are entitled to live in that property for the remainder of their life
and the property cannot be sold without their permission. If the surviving
partner chooses to sell and move to another property the proceeds
from the sale can be used to purchase the second property and the
terms of the trust remain over the second property. If there is any
excess capital following a sale then the money is invested and the
surviving partner can take the interest that is generated as an income.
YOUR CHILDREN'S INHERITANCE
The deceased's share in the property
is fully protected for the beneficiaries so even if the surviving
partner remarries, the children's inheritance is protected.
What are your other
These 2 alternative options are
less effective for different reasons:
could do nothing and hope that you wont need care in the future
but why risk half the value of your home worth tens and possibly hundreds
of thousands of pounds for the sake of a one time payment of a few
hunded pounds? savings on our fee may prove to be a false economy
as you leave yourself and childrens inheritance open to crippling
costs later in life.
2. Give your assets to your family now, but with
consequences, beware! They may lose any benefits to which they are
currently entitled or you could be vulnerable to family fall outs,
divorce or even the bankruptcy of a loved one.
Making a Pair of Protective Property Trust Wills
that is set up on first death is a cost effective and proven solution
as it only leaves the survivors share at risk.
Protective Property Trust Wills tick all the