Putting home into Living Trust

NotSpaghetti

I suppose it depends on the thinking behind it.
It must suit some people in some situations.

I think it suits the solicitors who peddle these solutions, they can charge ongoing fees for adminstrating the trusts - and dissolving them when the LA ignore them.

I suppose it depends on the thinking behind it.
It must suit some people in some situations.

Thanks everyone for the comments and experiences. Overall, it doesn’t seem to be a very good option.

A friend, married for many years with four children, put her half of their family home into one of these trusts for her/their children. But she has unexpectedly and sadly died before her much older husband. He needs to downsize but this trust is causing a lot of financial problems although very well meant.

Interestingly her husband, a retired accountant, hadn't thought it was a good idea, and in their case, he was absolutely right!

🌷🌷🌷

Both my DM and my FiL had dementia, and both were self funded in their care homes. To me it was something of a ‘luxury’ to be able to self-fund - to be able to choose the time and place, rather than being at the tender mercies of social services, who will often wait until relatives doing their best to care are on their knees with stress and exhaustion - before they will act.
Though given the cost of residential care, TBH it’s not surprising.

People with assets should pay for their own care, if needed. Why on earth expect our AC and that generation, to carry the burden of paying for you

Of course we don't know why GramaJ is looking at trusts.

Care home fees may be nothing to do with it. I think I have possibly been accidentally sidetracked by comments from 2507C0 and GrannySomerset.

Sorry.

These were my thoughts too M0nica.

Wholly agree, M0nica.

2507C0

GrannySomerset

And why should the rest of us pay your care bills if it does come to that? Because that is what is being proposed, and it hardly seems fair.

To me , it is hardly fair that people who have put themselves in debt for 25 or 30 years to buy a home of their own ( not to mention the amount of money spent on maintaining a property) and have done their best to have something to leave their children, have that taken away by exorbitant care fees, whilst someone in the same care facility who has chosen not to go without to buy a home for themselves and their family have there placement paid for by the rest of us.

If people rely on state care to pay their care fees, it is usually because in their working years they were too poor to be able to buy a house or build up a large amount of savings. I met so many people like this when I worked for a big charity for older people.

I cannot understand how anyone, while they were in their right mind would decide that they would rather put their extreme old age/disabled care in the hands of the state, who of necessity will not consider your needs or requirements and wishes when choosing a care home for you, only its price - the cheaper the better.

I can remember the feeling of relief I felt when I realised that if I go into care I can be self-funding, that if my problems are physical not mental, that I can exercise choice over where I go, what kind of place, whether I feel comfortable there, whether the foods suits me, whether I can get a room looking out over trees. If I have dementia, to know that my children would be able to choose somewhere convenient for them as well as me.

I also think it is monumentally selfish and uncaring to not pay for your care when you can afford it, but are happy to rely on people, taxpayers, on small incomes, in housing association homes, who will themselves have to depend on the state because they have so little.

I hold peoplelike that in the same contempt I hold billionaires who have so much money they do not know what to do with it, but wll leave one country for another in order to save money on tax payments.

Do not tamper with the waterworks; ie leave well alone.

You are concerned about someone in the same care facility who has chosen not to go without to buy a home for themselves

But I am concerned about those who never earned enough to do more than survive. They will have no choices - through no "fault" of their own.

The ones with a house to sell are actually the fortunate ones.

GrannySomerset

And why should the rest of us pay your care bills if it does come to that? Because that is what is being proposed, and it hardly seems fair.

To me , it is hardly fair that people who have put themselves in debt for 25 or 30 years to buy a home of their own ( not to mention the amount of money spent on maintaining a property) and have done their best to have something to leave their children, have that taken away by exorbitant care fees, whilst someone in the same care facility who has chosen not to go without to buy a home for themselves and their family have there placement paid for by the rest of us.

Yes had a friend who sorted their mums house into a trust, through a solicitor- he said it will protect them from having to sell the house, I don’t believe it will stop the social taking it to pay for her care when the time comes (full blown Alzheimer’s now). The two siblings have now fallen out, one wants the other off the paperwork.

Not sure if it’s different in Scotland. That half of the house was never mine.

I was concerned about my half of the house being inherited by my DH, which would have been the outcome of the original will, then being used for his care, which it would have been..

One person’s assets cannot be used to pay for the care of another person’s care in their lifetime.

But these kinds of 50:50 care fee protection trusts that only come into existence on the death of the first spouse won’t work depending on how much control the surviving spouse has over what can be done with the matrimonial home.

Questions to ask:

Can the surviving spouse continue to live in the matrimonial home?

Will the the surviving spouse be responsible for maintaining the matrimonial home from their own pocket?

Can they sell the matrimonial home and use all the proceeds to buy another home for thelmselves?

If they sell the matrimonial home, say to buy a less expensive property, freeing up capital that goes into trust, do they enjoy the income?

If they were to move again, could they draw on the trust capital to buy a more expensive property?

All of these things would constitute a bare trust that the surviving spouse would be considered to have an absolute entitlement to. If they then needed care, all of the value in their current property and any capital in the trust would be taken into account in a local authority assessment.

People are told that on the death of the first spouse, their share will go into trust say for the eventual benefit of a child or children of the marriage and can’t be used to pay for the care of the surviving parent should they need it. Be prepared for that to be challenged.

I mentioned this on a previous thread. I realised some years ago, that if I died before my DH, he would have to go into a care home. As stated in our wills at that time, he would inherit my half of the house. I had no problem with his half paying for his care, but wasn’t so happy about my share going that way too. Our wills were changed so that after first death, that person’s half of the house went into a trust for our AC. DH died so his half of the house is now in the trust. If I need care, the house will be sold, and my half will go towards paying for it, plus any other assets. DH did need care before his death, and his share of our assets paid for it.

My aunt did this. It was a disaster.

You can will your home and assets to whoever you like CJAM but inheritance tax is due over a certain amount, I assume that’s what the OP is trying to avoid, a dodgy path to tread.

That’s a bit harsh. I’m sure people have paid enough to the government without having to loose their home.
You have the right to stay in your home if your partner passes away. You gave thd right to will your home to your family and if it’s a blended family to whom the blood line should follow. It’s not IMHO deception it’s making sure in some cases a spurious family or step member takes the home from those who the owner wished to be a beneficiary. Don’t understand what or how all these so called tax and legal problems are being created.

Don’t do it. We have just updated our wills and legal advice was that we can protect 50% of value of house and this is not classed as avoidance, anything more would not be legal.
We are more than happy with this and do not wish to avoid paying for help should we need it.
Good luck.

Be very careful, my mother-in-law did this then it went into administration. we did get a bit of money back but nothing like the value she left in the building

You've earned it, enjoy it - I'm sure the kids would agree 😁

Don’t do it! A waste of money as I found out when my mother died. It died with her and she could have had a few holidays with what she had paid the trust fund operator. He was the son of good friends too and they got shafted as well ! Said son now lives somewhere in Spain , didn’t even attend his mother’s funeral!!
Be warned!!