A recent feature on ITV/STV's "This Morning" programme has again highlighted just how vulnerable most people are.
Are You Concerned About Losing Your Family Home To Pay For Care Fees?
Should you end your days in care the government will attack all your assets including your home.
Should you end your days in care the government will attack all your assets including your home. 1 in 3 women and 1 in 4 men currently go into care (source – “Help the Aged) - this is expected to double in the next 20 years and up to 70,000 family homes are sold each year to cover the owner's care fees. Parents are also seeing nest eggs built up as intended inheritances for their children decimated over short periods once they are in care. Current annual full time care cost runs at £35,000 to £36,000.
With proper planning this need not be the case. There are ways to protect the family home for the next generation. The solution is to ensure that the home is not personally owned on entry into care. The local authority's financial assessment can then legitimately and properly be completed on the basis that the home is not a capital resource of the resident.
The solution the use of a Trust and depending on your circumstances you may have several options as to the best use of this. This guarantees that the only people who will ever own your home after you have passed away are your children.
Two thirds of 45-65 year olds have made no financial plans to pay for long term care, or to protect their assets. Bearing the above in mind, this would leave our loved ones with more unnecessary pressure after we have passed away.
Lifetime trusts are often known as property protection trusts or asset protection trusts. Ilaws have consulted on, arranged and protected over £75M worth of property in Scotland.
Unlike will trusts, which come into being on death, lifetime trusts are established straight away. Your home is gifted to the trust, which allows you to carry on living in it. The rationale is that if you need residential care at some point in the future, you no longer own a house and can only be assessed on minimal assets.