Care Fees and Mum and Dad advice…. What do we mean?

When I am speaking to clients, I often ask myself ‘what would I recommend to my Mum and Dad here?’

This is the Gold Standard isn’t it? If we wouldn’t recommend a product or action to our parents, then we don’t recommend it to clients.

This is particularly relevant around planning for Care fees – many of our clients are keen to know how they can best protect their wealth in the event that one party goes into care.

Where clients ask about gifting property into a trust or outright, or generally making large gifts to family during their lifetime – as lovely an idea that it is, the circumstances must be right.

  • Planning for care cannot be the reason behind that gift. It simply won’t work – the onus will be on you to prove to contrary to the local authority and care won’t be funded in the meantime.
  • Consider what type of care home or plan you would like to be able to afford – the Local Authority will not fund The Ritz!
  • How do you feel about loosing control of assets?
  • The 7 year rule that clients often refer to for making gifts – this applies to inheritance tax planning and only where you don’t keep any benefit at all from the asset (i.e. if you still live in your home – you are still retaining a benefit).
  • Timescales are a myth, the local authority can look back as far as they want to. As intrusive as a financial assessment may feel, we are asking them to fund what is an expensive item, after all.

There are ways to plan for care – safely and legitimately, without parting with your assets, and without great cost either and this is by using a Will Trust.

There are different types of trusts available and that’s the complicated bit – but we will help you chose the right structure for you and your family.

  • A Will Trust directs your share of your joint wealth to the trust for your family whilst allowing the survivor to use enjoy your assets (money, home or otherwise) for their lifetime.
  • From a care perspective – you can’t deprive yourself of your ‘better halves’ half of the joint estate because it was never owned by you in the first place.
  • The trust comes alive when you die – so no gift made during your lifetime – you can change your mind.

A Will trust coupled with some sound independent financial advice can make a safe and efficient plan to preserve as much of your assets as possible, without placing you at risk – and without placing assets outside of the reach of the Survivor (just incase they do indeed, want to be cared for in The Ritz…!)