Business expert Katherine Rowell from D&K Wills talks us through everything we need to know about putting your house into a trust.
Over the past few weeks I have had several enquiries which have gone along the lines of the headline above. This is a popular question asked of most IFAs and estate planners.
With many having to pay care fees of over £100,000, it’s natural that people are looking to try and protect themselves against these costs. However, if the council can prove that a house was placed into trust or gifted they will still include the gift/trust in their calculation for what care fees you would owe. The key thing to consider is if the council could view anything you have done as a deliberate deprivation of assets in order to avoid paying care fees.
An example of when a trust would likely to be accepted is if an extended family were living together, and the property was then either gifted to the children or put into a trust for future generations. They would then become responsible for maintaining the house and supporting the older generation.
Another option is to include trusts within a will. This works especially well when there are two people left living in the property and can help to safeguard a property against future decisions or actions by the second survivor. It is also popular for blended families.
For example, Bob and Brenda are married and they own their own. They have three children who they want to safeguard as much as possible for their children to inherit. On the death of the first person, of them the 50% of the property they own is placed into trust for the three children but the spouse retains the right to remain in the house rent free for the rest of their lifetime. The spouse may also have the option to downsize and release some of the equity. In the event that the surviving spouse goes into care only the 50% they still own can be used as part of the care fee assessment.