With no prospect of a Government cap on long term care costs, and annual fees for care homes exceeding £30,000, having to sell the family home to pay for a place in a care home is a major worry for many older people.
But is it possible to protect the family home and other assets from the impact of long term care fees, asks Andrew Simpson, Lead Panel Solicitor with legal and financial planning specialist Ensure Inheritance.
Legal trusts, often known as Wealth Preservation Trusts, when used for estate planning purposes can have the useful side effect of protecting assets from the impact of long term care fees, but they cannot be used specifically to avoid care fees.
Many people do not realise that current legislation demands that anyone owning assets valued in excess of £23,250 is required to make a 100% contribution towards the cost of their care. However, anyone requiring care with assets worth less than £14,250 is not required to make any contribution from their capital.
The legislation also prevents people from deliberately moving their assets in order to avoid paying care fees. But it does not prevent anyone in relatively good health, who is not presently intending going into long term care, from estate planning and establishing a Wealth Preservation Trust.
By placing assets in a Wealth Preservation Trust, you are no longer (technically) the owner of the assets, but rather the principal beneficiary of the trust. So it can fully protect your assets for your children, provided the local authority cannot prove that at the time the trust was set up it was reasonably foreseeable you would enter long term care.
Using a Wealth Preservation Trust to plan your estate is a powerful means of achieving total control over what happens to your assets, who benefits from them, and who controls them.
Wealth Preservation Trusts can avoid claims on your estate after your death; reduce the time it takes for beneficiaries to receive their inheritance; protect your children against disinheritance; protect your assets from bankruptcy; protect your assets from divorce, as well as protecting your assets from the impact of long term care fees.
Setting up Wealth Preservation Trust is a job for a specialist solicitor who can establish the trust to meet your particular needs and future wishes, according to your unique set of financial circumstances.
Ensure Inheritance has produced a booklet which provides further information on Wealth Preservation Trusts. For a free copy, please contact Ensure Inheritance on tel. 0191 338 5143, via email at firstname.lastname@example.org or via its website www.ensureinheritance.co.uk.
Based in Seaham in County Durham, Ensure Inheritance provides a range of legal and financial planning services which help protect financial assets to provide their clients and their loved ones with peace of mind. In addition to long term care planning and wealth preservation trusts, services include funeral planning and pre-payment plans, Wills and Estate planning, funeral planning, inheritance tax planning, powers of attorney, court of protection deputyships, and probate.