Protect the family home

Protect the family home
November 22 21:17 2011 Print This Article

Saving your inheritance! This is a topic mentioned by many of our clients as concerns rise regarding medication and the latest in our health system assisting in helping us all live longer in life. However, many parents and family members are having to reside in a residential home either through eventual ill health, strokes, dementia, Alzheimer or several other serious illnesses which require constant help and attention.

Every year 7,000 homes are sold to pay for care homes costs.

£600 per week is the average cost of a care home or £31,200 over one year!

Paying for care

Care is only 100% funded by the Government is you have savings/assets valued at less than £14,000* each (including your home/property)! (Figures correct as of 2009/10 and are subject to change annually)

As you would expect there is a great deal of law surrounding this area, which prevents individuals transferring assets in order to escape from paying for care home fees.

It is commonly thought that transferring the home to the adult children will prevent it from being used to fund the care fees.

Such transfers are likely to be challenged by the local authority as a deliberate deprivation leading to the home being sold to pay care home fees in any event.

In addition, outright transfers of property to children can create further problems.

For example, if the adult child dies before you, your home will pass to the beneficiaries of their estate, which is likely to be your son-in-law or daughter-in-law, also if your adult child was to get divorced, your home may form part of the divorce settlement!

There are many misconceptions regarding the gift of a property being safe from assessment by a local authority if a certain amount of time has passed since the making of the gift.

For example, there is much confusion surrounding the length of time for which a property has to be given before it is considered ‘safe’ from assessment by the local authority when care is required. Time limits mentioned range from 6 months to 7 years. The 7 year figure often arrives from confusion relating to Inheritance Tax law. The correct situation is that there is no time limit given in the legislation and a Local Authority could go back as far as they liked if they believed a deliberate deprivation has occurred.

What is the Solution?

The solution is putting your home/property into a Trust!

The features of the Trust ensure that the individual creating the Trust has a guaranteed right to live in the property for the remainder of their life.

It is imperative that specialist advice is taken at the earliest possible opportunity in order to ensure that your home is protected for the next generation.

Contact ourselves at Bentley Brown (IFA) on 0800 848 8908 for a FREE consultation.

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NorthEastBiz
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