If you’re concerned about the potential costs of long-term care, trusts can be a valuable tool to help you protect your assets. By understanding how trusts work and the different types available, you can make informed decisions about your estate planning.
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Why Trusts Can Protect Your Assets from Care Home Fees
The cost of care home fees can be substantial, and the financial burden can be significant for both individuals and their families. Trusts can help protect your assets from being used to pay for care home fees by:
- Devolving Assets: By transferring assets into a trust, you can “devolve” them, meaning they are no longer considered your property. This can make it more difficult for the local authority to assess your eligibility for means-tested care.
- Creating a “Look-Back” Period: Some trusts can create a “look-back” period, which means that assets transferred to the trust within a certain timeframe will still be considered your property for the purposes of care home funding. However, if the trust is properly structured, you can potentially avoid this.
- Using a Discretionary Trust: A discretionary trust gives the trustee the power to decide how and when to distribute the trust’s income and capital. This can make it more difficult for the local authority to assess your financial circumstances.
Types of Trusts for Care Home Fee Protection
There are several types of trusts that can be used to protect your assets from care home fees:
- Marital Trusts: These trusts are designed to protect the assets of a married couple. One spouse can transfer assets to a trust while retaining the right to receive income from the trust.
- Discretionary Trusts: These trusts give the trustee the power to decide how and when to distribute the trust’s income and capital. This can make it more difficult for the local authority to assess your financial circumstances.
- Deprivation of Assets Trust (DOT): A DOT is a special type of trust that can be used to protect assets from being used to pay for care home fees. However, DOTs can be complex and require careful planning.
Important Considerations
When considering trusts for care home fee protection, it’s important to be aware of the following:
- Local Authority Rules: The rules governing care home funding can vary from one local authority to another. It’s essential to understand the specific rules in your area.
- Look-Back Periods: As mentioned above, some trusts can create a “look-back” period. This means that assets transferred to the trust within a certain timeframe will still be considered your property for the purposes of care home funding.
- Tax Implications: Trusts can have tax implications. It’s important to consult with a tax professional to understand the potential tax consequences of setting up a trust.
The Role of a Solicitor
A qualified estate planning solicitor can provide invaluable guidance when it comes to using trusts to protect your assets from care home fees. A solicitor can help you:
- Assess your needs: A solicitor can help you determine the most appropriate type of trust for your circumstances.
- Draft the trust documents: The trust documents must be carefully drafted to ensure that they achieve your desired outcome.
- Provide ongoing advice: A solicitor can provide ongoing advice and support to ensure that your trust is properly managed.
Conclusion
Trusts can be a valuable tool for protecting your assets from care home fees. By understanding the different types of trusts available and the potential benefits and drawbacks, you can make informed decisions about your estate planning. It’s essential to consult with a qualified solicitor to ensure that your trust is properly structured and meets your specific needs.
How we can help
We have a proven track-record of advising upon all aspects of private client work. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.to incorporate, what kind of ownership
How to Contact Our Private Client Solicitors
It is important for you to be well informed about the issues and possible implications of setting up a Trust in Will. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Trust solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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