Putting house into trust to avoid care home fees

[Winterday1991]

A friend mentioned that her parents had put their property into trust to avoid potential care home fees liability. Is this as simple as she suggests? Would this not be classed as deprivation of assets by the council?

People’s selfishness never fails to amaze me. It’s no wonder we’re in the mess we’re in.

Because there are other people who didn't have savings or a house or plan for the future who do get their fees covered. That is entirely unfair.

It is deprivation of assets unless done for some other reason than to save assets from being means tested. If councils don't bother to pursue it, that is a poor council wasting tax payer money.

I would not do what some people have suggested and leave one half in trust in a will. It is entirely legitimate for the survivor's care home fees to be met from the house as a whole it is really important that they get the best care possible rather than be tax payer funded. It doesn't protect the survivor's half share either as the council can still bring it into account.

I know care is very expensive but I do think that either if people can afford to pay for it they should or that taxes have to increase to fund it properly for all.

It’s what everyone does when they don’t own a house. Plenty of people have housing and care at the expense of others, there’s nothing disgusting about it. It’s what happens in civilised society.

Why do you think only some people are worthy of being cared for by the state and not others?

Would you really want to swap with those people? You reach the end of life with no assets, presumably meaning you’ve struggled for money all your life, and at the mercy of where the council choose to put you.

My grandparents did this but it only protected each of their halves.

So if my grandad died first half the house would go into trust to my dad and vice versa.

That way half the house was protected from care home fees.

Which I think is fair enough as only one of them ended up in a care home.

Everyone is worthy of being cared for by the state IF they need it

I also don't understand this logic. Who are you protecting?

If you do this, you are basically saying - when the times comes, I prefer to have the absolute basic tax payer funded care available to me. Whilst my assets are given to other family members instead.

I would much rather that any 'inheritance' I may receive was used to make the care of my parents as comfortable as absolutely possible, the best we could afford. I would not be able to look myself in the mirror, to have their assets at my disposal whilst they are in tax-payer funded basic care.

I would seriously question any children who would support their parents in such schemes.

My parents had a trust in that when my mum
died her death automatically created the trust via her will

my dad had the right to live in the house
he could move and the trust would carry on to the new house
if he went into a nursing home my mums half of the house couldn’t be touched for fees

we had to do an annual tax return for the trust and that has to be done within two years of the death

we didn’t know that till after my father also passed away and we did it late via our accountant HMRC we’re helpful and didn’t charge us any late fees or penalties- they could have but they accepted that as soon as we became aware we did the right thing and apparently it’s very common

my father passed away a few years later
so the house went to the grandkids who were named in the will

if your a trustee of the trust the solicitors should update the deeds of the house to reflect the change of ownership so your often on the deeds of the house with the surviving spouse
this is to prevent the sale of the house by the surviving parent as all owners / trustees would have to be consulted

So if you claim any benefits there is the possibility of you being assessed as a house owner / beneficial owner if the trust half of the house is put in your names on the deeds for the trust

you will have to prove to the DWP that you are a trustee of the property and not a beneficiary ( easy to do if you have the will) and it’s written properly but if your also a beneficiary in thr future it may not be that clear cut .

There is also a chance if your a trustee / beneficially and on the deeds of the trust half of the house you wouldn’t be classed as a FTB anymore as your on the deeds of a house that your a beneficiary of .Even if you don’t benefit from the house at that time

Having visited a number of care homes looking for care for my mother with dementia, I'm exceptionally grateful that my parents have enough money to be able to pick the one they wanted and not have to go for the cheapest.

100% this.

How can you go and visit your ill parents in poor conditions then go home to your nice home in full knowledge your inheritance is "protected"?

So much for family ay?

If you do this, you are basically saying - when the times comes, I prefer to have the absolute basic tax payer funded care available to me. Whilst my assets are given to other family members instead

Totally agree. Not to mention that said family members, usually offspring, will be middle-aged by then, long since independent adults capable of earning their own money. Past needing financial support from their parents, one would hope!

My DPs have done this, they're from very poor backgrounds and only bought a house due to but to let.

They're obsessed with leaving something to their children even though we don't need it!

DS is the executor and has POA so if either of them need care we'll just use the house money to fund a nicer place anyway.

Although in our family people seem to drop dead rather than lingering, they're both terrified of going into a care home so are hoping the family tradition carries on. It's quite morbid.

We will do what's best for them despite their own plans.

Oh behave 🙄

Have they thought about how they would fund care if they need to?

I don't know what to think really.
What I do very much suspect is that the very richest people will use the best legal advisors and accountants to make sure they pay out as little of their money as possible. This makes me wonder why those who have only one standard home are so demonised for doing the same.

@Caterpillarsleftfoot
Because there are other people who didn't have savings or a house or plan for the future who do get their fees covered. That is entirely unfair.
You do know there is a huge part of the population who don't earn enough to save or buy a house, horrible attitude from you. Bring back the poorhouse eh

I guess it’s a question of choice. Those who (whether by luck or hard work) end up with a house want to be able to decide whether to use it to pay for care home fees or to leave it to their children.

I think they should probably educate themselves on the current cost of a decent care home before they make that choice though.

It was on Radio 4 ages ago, the LA use the insolvency laws to overturn the trust.

Unless you’ve got generational wealth what other reason would you have for putting a 4 bed detached in Rugely into a trust 🙄 but to avoid care home fees.

None of those people will be expecting the state to fund their care home fees though.

It's apples and oranges.

Get off your high horse. No-one gets "free" care, even without capital it's financially assessed and charged for on income.

Only exception is NHS continuing care which depends on level of needs and is independent of funds. Also bloody difficult to qualify for.

@Caterpillarsleftfoot you do realise that many, many people can't afford to buy a house? It's not a case of them spending all their money on high living, it's a case of being on minimum wage whilst doing essential jobs (like working in a care home).

Saying its unfair that people who have been able to buy a property have to sell it to pay for care home fees is ridiculous.

One thing that’s hardly ever mentioned in this context, is that it can be something of a ‘luxury’ to be able to self fund, rather than being at the mercy of permanently overstretched and under-funded social services.
You can choose the time and the place.

If you’re reliant on SS for funding, they will typically leave it until family members doing their best to care are on their knees with stress and exhaustion. I’m thinking particularly of dementia here, having been through it all twice - with my FiL and my DM (both self funded).

It’s emphatically not a case of thinking ‘It’s probably time for a care home for mum’, and bingo, social services will step in.

I heard of someone who became so desperate, she told SS that if they didn’t do something now, she was going to take her father (with dementia) to A&E and leave him there.
Only then did they step in.

Different councils seem to pursue different systems. Cutbacks mean they are chasing about more for money.

Absolutely