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Legal, pensions and money

Putting house in trust

(36 Posts)
Marydoll Sat 23-Feb-19 00:09:30

When we were updating our will the other day, we were advised to put our house in trust.
I'm unsure whether this is a sensible thing to do.
Does anyone have experience of this? Your comments would be appreciated.

Nonnie Mon 01-Jul-19 17:20:46

I am not an expert but it is my understanding that a house does not have to be sold to pay care fees if the spouse is living in it.

I am pretty sure that if the LA thinks you have deliberately done anything to avoid paying fees they can make you pay.

If this is about IHT I very much doubt there are any legal schemes left to do this. Lots of loopholes have been stopped.

M0nica Mon 01-Jul-19 16:48:10

Razzy Frankly I couldn't give a toss how other people with similar incomes and savings to me spend their money. My greatest relief is that DH and I will not be dependent on the state should we need care of any kind near the end of our lives.

Read any newspaper and you will see how appallingly care is for many old and infirm people if they are unable to afford their own care. The price LAs will pay for residential care is usually below the cost of providing that care and the stories of dreadful care homes usually come from homes providing mainly for those dependent on LA funding.

It is bad enough that so many people at the end of long lives often devoted to care of others should be condemned to such poor care from the country they served. That anyone should heedlessly choose to opt for it when they could afford other, if it were not for reckless and wasteful spending, is insanity.

I am not insane I am glad to fund my own care that more may be available for those who cannot afford it.

mumofmadboys Mon 01-Jul-19 06:47:37

I agree with Monica's post

Tartlet Mon 01-Jul-19 02:58:13

There is nothing immoral or illegal in a couple choosing to leave their share of a property to whomsoever they choose. We have a property trust in our will so that, when the guest one of us dies, their half share is put into trust for our children so that the survivor can continue to live in the house during their lifetime or use the proceeds of any sale to buy another property should they so wish.

Doing this won’t avoid or evade any care home fees for the first to die should they need to go into care. What it avoids is my husband’s share of the property being at risk of being used to pay my care costs should that be needed after he dies had he opted instead to leave his share of the property to me.

It also gives us each the reassurance of knowing that some of their estate will go to the children rather than being wasted (wine, women and song) by the survivor or lost to possible second spouse or step children. We have known the latter happen.

Razzy Mon 01-Jul-19 00:39:15

Monica I disagree. I have friends who have earned exactly the same money as me, yet chose to spend it on luxury holidays, expensive TV, new decor regularly, expensive cars, etc. I have worked my butt off from nothing and still save save save, because I have been very poor, yet I will have to pay for my own care and they will probably have spent all their money by then and get it for free. I don't think that is fair at all. So perhaps I should go out and blow the cash and then rely on the state? Or perhaps I should not have worked so hard, and relied on state benefits and get the state to pay for my care home fees and my housing?
I think if someone has worked hard all their life, and chose to live frugally then the money they saved by doing so should not be taken by the state.

Dinahmo Sun 02-Jun-19 20:04:04

I have been looking into this for a client whose parents have a home in the UK and 2 abroad. There are 3 siblings and 5 grandchildren. He was asking about trusts. The problem with them is which generation do you have as beneficiaries. If it's the grandchildren, what happens if one of them wants to buy a home of their own. The questions go on and on. If your estate is largish then you should speak to a solicitor who is expert in trusts and you must also know what you want to happen.

Blinko Tue 28-May-19 10:49:11

Regarding Tenants in Common, I don't think a house can be sold to pay care home fees whilst the spouse is still living in it anyway. It could help to mitigate the eventual liability, though.

As M0nica says, provided your offspring are well on their way in life, they may not need your money and it could ensure you have more choice of care home, should the need arise.

M0nica Tue 28-May-19 10:39:10

EglantineSo am I. Having spent over 30 years visiting friends and family in care homes, some self funding, others dependent onthe state. As a result one of my biggest securities going into old age is knowing that I can fund any care I need and not be dependent on the state.

I think it is utterly immoral and unjust to evade paying for your own care. If you can afford to pay for your own care it suggests that you have had a successful career and been paid well for it - or inherited money you didn't work for.. You will have worked hard but so will most people who have been in much less lucrative employment.

This means that your children will have had a head start in life; gone to good schools, to university, have good jobs, own their own house, if a child is handicapped or disabled in any way that is different.

By wriggling out of paying for care you are asking tax payers many of which will be less successful in life than you, earn much less, have children in poorer jobs, to bear the burden of paying for your care so that your children already living comfortably can receive a large sum of money when you die.

The selfishness of this is mind boggling.

Eglantine21 Tue 28-May-19 10:17:07

I’m going to use my house to buy me the best, luxury care available!

Teetime Tue 28-May-19 10:11:30

We recently did our will and discussed this trust thing. We were advised that if you do it too near the time of going into any sort of care facility it could be seen as deliberately trying to avoid care fees and Social services could and probably would take legal action to recover the fees. apparently this has to be done well in advance of needing care (but how does one calculate this). The fee for arranging all this was in excess of £3K so we just updated the will and did our Powers of Attorney at the same time.

Lovetopaint037 Tue 28-May-19 10:07:19

We looked into it and didn’t fancy it at all. Primarily you are giving your home away out of your control. Also, remember that if one spouse does not use his tax allowance of £350,000 then it passes to the remaining spouse. That gives your children £700.000 before tax.
Of course you protect your home from care home fees but you need to weigh everything up.

Nannarose Thu 28-Feb-19 13:36:57

Age Concern do have good advice, and so do major charities such as Mencap and others.

I understand that for most people, putting a house into trust can be complicated, expensive,and usually unnecessary.

I think in less common circumstances then you need to consult a specialist (STEP) solicitor.
Putting a house into trust for a vulnerable family member may seem sensible, but can have unforeseen complications, and needs careful thought.
I think it may be worthwhile if a house is regarded as an asset for the use of family members, instead of an individual's home.

Witzend Thu 28-Feb-19 13:22:51

One thing people often don't seem to think of, when seeking to keep assets 'safe' from care home costs, is that if and when the need comes, it will usually be an awful lot quicker and easier to arrange if the person can be self funded, rather than having to rely on the tender mercies of social services. Who will typically want the person to stay at home even past the point where it's safe or desirable for them to do so, because they are under a lot of pressure to keep costs down.

mumofmadboys Wed 27-Feb-19 18:15:13

Life is not fair.

JenniferEccles Wed 27-Feb-19 16:45:11

In my opinion there is nothing whatsoever immoral in wanting to protect our assets for our children, savings and property which we have worked hard for our entire lives.

What is immoral though is the fact that you can have two elderly people next to each other in a care home where one has to use their hard earned savings to pay for the care, and the other one who has squandered their money all their life, sponging off the State, yet gets the same level of care.

Cabbie21 Mon 25-Feb-19 13:31:53

Nothing wrong with ensuring your spouse can stay in the property if one of you goes into care, but I think that is already legislated for, likewise if a vulnerable dependent or career is still living there.
A Will can’t legislate for what happens before you die, though. We own our property as tenants in common.

oldgimmer1 Mon 25-Feb-19 10:54:03

Apologies @marydoll - I was looking at the wrong post! D'oh.

If it's to avoid care home fees then that's a different matter.

Urmstongran Mon 25-Feb-19 10:18:44

The whole concept of funding care home provision needs a radical rethink by parliament.

littleflo Mon 25-Feb-19 09:24:32

We were advised the same. The idea being that you each own half the house and when you die your half goes to the person of your choosing. The proviso is that it cannot be sold while the surviving spouse is alive. It protects the inheritance if one partner should remarry after the partners death. It does of course mean that it cannot be used for nursing home fees. In this case it is important to override that in the Will or ensure that the right is waved if you need it for fees.

We have done this as I trust my children absolutely, but not any future spouse of DH.

Cherrytree59 Mon 25-Feb-19 08:06:52

What about looking into Tenants in Common
This is what we have done on our Solicitors advice.

Marydoll Mon 25-Feb-19 07:33:28

My thoughts exactly! Why is this still legal?

DH has now agreed, we will not be doing it, but I just wanted others' thoughts on the subject.
Thanks for your comments.

Jane10 Mon 25-Feb-19 07:29:10

It is immoral to try to prevent paying for care home fees. If you don't pay them who does? Us other people will have to via our rates and taxes!

Anja Mon 25-Feb-19 07:26:54

It’s a minefield isn’t it?

I would love to pass on our house to our children but why should the state pay for my care fees (should I need them) when I have the means to pay myself via my house?

Marydoll Sun 24-Feb-19 23:50:06

That's what I thought! Thanks for the link, janeainsworth

janeainsworth Sun 24-Feb-19 23:33:28

Did you consult a solicitor marydoll or just a will-writing service?
This article might give you some idea of how complicated this is.
www.google.co.uk/amp/s/www.telegraph.co.uk/money/ask-a-money-expert/can-put-home-trust-dodge-care-costs/amp/
The position may be different in Scotland too.
The questions I would ask of the person who has advised you, is ‘Can you guarantee that under no circumstances would the value of my home be used in any assessment of liability for care home fees?’
and ‘Would there be any capital gains tax liability for my children on my death because the house has been put into a trust?’
Find a solicitor who can advise you properly. If these trusts were a good idea, everyone would be doing it.