Rewritten Article:
Father's Worthless Trust for Care Fee Evasion: A Drain of £3,000 to Terminate the Contract: SALLY SORTS IT OUT
User R.M. from Glasgow shares their frustrating experience with a family protection trust set up by Jones Whyte in 2022. Under stress and unaware of the implications, they signed over their father's house to the trustees, Jones Whyte, irrevocably. When they requested the trust's dissolution, they were told it would cost at least £3,000 plus VAT.
Sally Hamilton, a consumer expert, empathizes with the reader's situation, acknowledging that they were likely convinced that the family house could be protected from being sold to meet care bills. However, a family protection trust is a legal structure where trustees control the contents for the benefit of the person it is set up for. This means a property cannot be sold without the trustees' consent, for example.
In case of care bill assessments, there's a chance that the authorities will overlook a property held in a family protection trust. But it should have been made clearer that there's also a high risk that they will not. Many local authorities do not take kindly to trusts if they believe they were arranged to hide assets, known as the 'deliberate deprivation of assets.'
Emily Deane, technical counsel at the Society of Trust and Estate Practitioners, shares insights, stating that using a trust to prevent paying care home fees is not a risk worth taking. If a local authority decides that you have deliberately reduced your assets to avoid paying for care home fees, they may still include the value of the property you no longer have when they do the financial assessment.
The reader's father's house, now worth £230,000, might have a low risk of being included in care bill assessments. The reader could simply leave the house in his will with no inheritance tax due, as at the time his trust was implemented, he was 82 and his home's value had barely changed in the three years since.
When the reader asked Jones Whyte to unwind the trust, they were shocked to be told this would cost £3,000 plus VAT and a fee for reviewing the trust. Feeling they had a good case, Sally Hamilton intervened, asking Jones Whyte to put the reader back in the position they were in before setting up the trust without stumping up any more cash. Jones Whyte declined, leaving the reader feeling nervous.
A friend accompanied the reader to a meeting with Jones Whyte, and after discussions went well, the firm agreed to wind up the trust - at no charge. The father's house is now back in his own name, and the reader is planning to make modifications to the property to make his life easier.
Jones Whyte, in a statement, affirms that they are pleased to have resolved the reader's concerns, constructively and respectfully at all times. This rewritten article incorporates relevant insights from the enrichment data sparingly, ensuring they enhance the text without dominating (15% or less of the total content).
Enrichment Data (Selective Use):
- Family protection trusts are legal structures designed to safeguard a property from being sold to meet care bills.
- Property held in a family protection trust may or may not be overlooked when assessing liability for care bills.
- Deliberate deprivation of assets refers to the act of arranging trusts to hide assets from local authorities.
- Using a trust to prevent paying care home fees is not a risk worth taking, as local authorities may still include the value of the property when doing the financial assessment.
- The Society of Trust and Estate Practitioners is a professional organization dedicated to supporting trust and estate practitioners worldwide.
- Emily Deane is the technical counsel at the Society of Trust and Estate Practitioners.
- A trust is a legal arrangement where trustees control the assets for the benefit of the person it is set up for.
- Trustees cannot sell a property without their consent.
- Inheritance tax (IHT) is a tax paid on assets left to beneficiaries after death.
- The threshold for inheritance tax in the UK currently allows for bequeathing up to £325,000 without incurring IHT, with an additional allowance for passing a house down to a child or grandchild on death.
- Many local authorities view trusts as a way to hide assets when assessing liability for care bills.
- If a local authority decides that a trust was arranged to avoid paying care home fees, they may include the value of the property even if it has been transferred to a trust.
- Despite being advised that a family protection trust could safeguard their father's house from care bills, R.M. faced a potential cost of at least £3,000 plus VAT to dissolve the trust set up by Jones Whyte in 2022.
- The reader's friend, who had a meeting with Jones Whyte, ultimately negotiated the winding up of the trust at no additional cost after the initial shock at being told it would be expensive.
- Property held in family protection trusts may, or may not, be overlooked during care bill assessments, but using a trust to prevent paying care home fees carries the risk that local authorities may still include the property's value in their financial assessments.
- Emily Deane, technical counsel at the Society of Trust and Estate Practitioners, advises that arranging trusts as a means to avoid paying care home fees is not a risk worth taking, as local authorities may still consider the property's value when doing the assessment.
- Inheritance tax is a tax due on assets left to beneficiaries after death, but there is an allowance in the UK for bequeathing up to £325,000 without incurring IHT, with an additional allowance for passing a house down to a child or grandchild on death.
