Selling home to pay for nursing home fees?
Is it possible that you can avoid selling home to pay nursing home fees? With some advance planning and good advice which we can provide, the answer is often yes – at least in part. But it can only be a side effect of a more in-depth program. If you set up a plan with the specific intention of avoiding care fees, we believe it could well fail if challenged – and getting the £3,000 fee back (we don’t charge that much) is not really much consolation if the Council has taken your home. We prefer to set up our plans so your trustees are able to help contribute to your care fees so you don’t end up in the cheapest possible home.
So avoiding nursing home fees are not a great reason to set up a trust:
But the good news is that there are masses of really good reasons to set up a property trust, some of the beneficial effects are listed below. Our booklet, Asset Protection Secrets can give you more details on how it may be possible to avoid selling a home to pay nursing home care fees.
Often families believe that by gifting their property to loved ones it will protect their home from being sold to pay care fees. In reality, the first thing they achieve is an unnecessary tax bill – see below!
Strangely, if your wish is to avoid care fees, Protective Property Trust Wills are far less likely to be successfully challenged than the so-called “guaranteed” trusts sold by many firms: indeed, it is our opinion that their Achilles heel is their “guarantee” which gives the clearest possible indication that the purpose of the trust is to avoid care fees- which makes the trust vulnerable to attack.
Giving your home away can leave you open to big risks for example, the people you gift the property to may (quite apart from the Capital Gains Tax bill which will grow automatically over time):
- Possibly an immediate Inheritance Tax bill.
- Become bankrupted or just have trouble with creditors.
- Die before you decide to sell the property
- Have their own care issues.
- Get divorced (in which case you could become homeless as part of the divorce settlement!)
- Their long-term illness could undermine their finances, leaving your home vulnerable. Worse, if they lost mental competence through accident or illness, the Courts could appoint a solicitor to manage their affairs.
In any of these cases by giving your home to your children or anyone else, they become the owners. Your home is now THEIR asset, and if they have claims against them YOUR HOME is under threat. Also this means that you no longer have the right to sell your home – it no longer belongs to you. The new owners would need to be the ones who agree to sell it and decide what to do with the capital and income. Within a probate property trust, you chose the trustees, and give them guidance as to what you would wish them to do. Not only that, but the trustees are duty bound to look after you.
What other benefits does setting up a Trust provide?
The Probate Home Protection Trust also brings extra advantages to subsequent generations. For example, the Probate Home Protection Plan can:
- Look after your family for up to 125 years.
- During that time it can make loans to your chosen beneficiaries and their children and childrens’ children and so on. This might be done for example, if the beneficiaries marriage was in trouble. The loans could even be repayable on death to help future generations.
- Disabled future family members can be helped without losing entitlement to State benefits.
- Or make outright gifts if that is more appropriate.
This type of planning is often referred to as ‘blood line planning’.
Can I avoid selling my home to pay nursing home fees?
Avoid selling home to pay for care fees - it’s not just a UK problem!