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Setup Trust to avoid care home costs. - Carers UK Forum

Setup Trust to avoid care home costs.

All about money
I have recently been told that the best way to avoid care home costs is to move property into a trust and appoint trustees and beneficiaries. It will almost certainly need to be done through a solicitor, any idea how much its likely to cost.
I have also been told that if you sell your home to a relative eight years before you enter a care home, you will not be asked to contribute towards care homes costs. Can anyone who has knowledge or experience about this advise on which would be the best option.
It's certainly worth seeking legal advice. My situation is slightly different, but I've just made a Will due to my mother's sudden onset Vascular Dementia last Autumn. I had to make one anyway, but the key driver was to ensure arrangements are in place should I pre-decease my mum. The solicitor who has dawn up my Will has said a Trust gives extra protection for the control of the funds towards care home fees, should the situation ever happen. I don't think under this plan you would be able to avoid care home costs though - it just gives an extra level of check and control in how the money is controlled/spent.

The best way to get funding for future care home fees is to make sure the individual's assets, such as property, are 'handed over' to others before the need/assessment arises. I think the magic figure is 7 years - if they haven't owned the property or had those funds for over 7 years, they cannot be counted (this was my solicitor's first question!).

You could argue whether it's fair to do this in order to get SS funding later on, when those who didn't do it have to fund every penny of their care, but the way I see it, if there are ways and means, and they are perfectly legal, then why not? In my case, I am an only child, no kids, and I need to think about my future and when care homes may cost £5k a week, never mind £1,500 - so I had to protect my inheritance to look after my own care one day. These amounts are peanuts compared to the tax evasion tactics very wealthy people use, so I don't feel bad at all about having put 'things in order'.

PS - my legal arrangements are costing just over £350.
The first question is whether you can afford to give away your assets forever? Whilst you can set up a trust in favour of others, you cannot be a beneficiary of any trust you set up. If you put your property in trust, then you have to pay the trust the market rent.
I'm currently rearranging all my affairs, with the aid of a specialist solicitor. My house cost well under £20,000 but property prices in the New Forest have rocketed, so just the house alone takes me well above the IHT limit! I have a long garden, since my husband died the bottom half has informally been my eldest son's half - where he keeps all the old machinery etc. So I'm cutting my garden in half, it will need to be registered separately at the Land Registry, and putting it in a trust for both sons and grandson. Not only will this save me from IHT but reduces any care bills. My investments are all held in bonds which do not count as capital as far as the LA are concerned, only the income would count. Eldest son lives with me, so the house cannot be sold as it would make him homeless. I'm planning to put more in trust as I get older.
Here's an article, but from 2013. I imagine it still applies.

http://www.telegraph.co.uk/finance/pers ... perty.html

If you want to set up a trust where you are one of the beneficiaries it is likely to be queried. If you want to give money away or set up a trust and you are already in need of care, although not yet of a care home, it's likely to be regarded as depriving the social services and be reversed.

I think Maz's situation and mine are different from Tony's: I too have written a will in case I die before my brother. He is 13 years older than me and bedridden. If I die, a trust will be set up over my property, half of the house for example, and that will mean that it only goes for his benefit and not to social services. But that is not his assets being protected from social services, but mine, which have nothing to do with him. So no big deal. There are other beneficiaries but I can't even choose which inherits after his death, because I am not in charge of the trust.
Thanks for the replies. Someone I met in my mothers care home told me they rent out their mothers house and provided they use all the revenue to pay the care home fees, they can keep the house. They did not say how much rent they get or if all the care home costs are covered.
My mother has been self-funding in residential care for almost three years. From the start we rented out her property.

Roughly, in every four-week period, one week is funded by rental income, another week by state/private pensions and attendance allowance, and the remaining two weeks out of her savings.

We know that when her savings drop to below £23,250 (luckily, not for a few years yet) then her property will have to be sold. I don't think we can hold on to it further just because it's being rented out!
Pennie, there is a "deferred payment" scheme. Coincidentally, I have on my coffee table this morning a House of Commons Briefing Paper entitled "Social Care: paying for care home places and domiciliary care (England) by Tim Jarrett. It's not very long, three pages 16-18, will tell you more about the scheme.
I'd recommend this document to anyone being charged by the LA. It is clear from this document that the way the LA are dealing with my son's "personal budget" is not being handled properly. Advocate due in an hour!!!