Hi,
I had an appointment last night with Accord Legal Services, who are offering free wills for NHS staff (and perhaps other public sector).
The free will service seems to be completely legit, but not unexpectedly, they have recommended an additional pay for item.
Specifically a property protection trust that protects 50% of property value for children against potential future partners and care home fees, for £395 + VAT.
This feels like a good thing to have and I cant see any disadvantages, but are there any? It also feels like I'd be spending £450 on something that is very likely to be superseded before its needed. Is the quoted price typical?
My wife and I are both in our 40's with no plans on dying, with kids under 10.
Thanks for any thoughts or advice.
The free will service seems to be completely legit, but not unexpectedly, they have recommended an additional pay for item.
We had similar, cheap wills but they were pushing power of attorneys at 5x the going rate.....
huh? 50% of property value for children against potential future partners?
What does this mean? When you die you pass your house to your children. Do you not trust them to do as they see best with the money? Trust them to choose partners? Let them make there own mistakes? They can dissolve the trust immediately anyway and do as they wish with the money.
50% of property value for care home fees?
Read up, the tories introduced a care fee cap of £86k
So if you are happy going into the most basic of homes, then all you will pay is max £86k
However if you'd like something nicer, you'll be spending more of your money, which includes selling your house when your other money has run out.
What exactly is it protecting?
The very person who should be advising you about this stuff, is trying to upsell you.
I would go elsewhere.
Your house isn't 'safe' against care home costs. MIL's exceeded her life expectancy in a care home, and as it was before the cap, all will be gone bar £23k.
Your house isn’t ‘safe’ against care home costs
This. Especially if the authority finds some lineitem in a previous bill titled Deprivation of Assets.
That's an open goal right there.
It's legally and morally dubious. Trying to defraud the taxpayer into covering your end-of-life care in order to pass your home onto your children is particularly ironic for a company working with the NHS.
The point about future partners is that if you die and your spouse inherits (which would be fairly normal), they may then (be persuaded to) pass on the wealth to their new partner and family, leaving your children with nothing. Not in Scotland of course where the children have inalienable rights, but the rest of the UK.
Also, a marriage immediately makes a will invalid, so it could happen due to carelessness/procrastination on sorting out a new one.
I don't understand what this trust is claiming to achieve. Are you gifting the property to your kids now, with their share reverting to someone else if they pre-decease you?
The deprivation of assets is something that's ended up with various loop holes being closed. We've a 'charge' on MIL's home from the local council.
It's actually £20k cheaper per year, to do it this way and leave the house empty. It's been empty 3 years now. So £150k spent so far, would have been £210k in care fees, as there is a 'cap' on the fee that's paid to the home - enter a private agreement, then the fee goes up.
If we rented out, the council would take a significant portion of the rent, which doesn't really leave enough for landlord repairs, nor could we afford to bring the house upto 'standard' to rent out. No wonder there is a housing problem.
The house will probably be sold to a developer once MIL passes away - it needs work, especially after having elderly folk in it for years, then empty. It's a large 4 bed family home.
SIL thought she could 'buy' it cheap last year, basically exchanging her 3 bed for this. We said there isn't a chance as we have to protect the property value and it has to be market rate due to the council 'charge' - mentioned deprivation of assets to her - she took the hump, but we can't sell it 'cheap'.
As above, it sounds very dubious.
It also feels like I’d be spending £450 on something that is very likely to be superseded before its needed.
My parents set up a very complex arrangement with 3 life policies and a trust, to try to protect some of our inheritance from tax. It's taken me many hours to figure out, now my Dad's died and I'm PoA for Mum. It was also pointless, as they've effectively locked up the money from 1986 until whenever my Mum dies; if they'd just given us the money (which would have been very useful in 1986) there would have been no tax as they both lived more than 7 years from then.
But if you do go for a Trust, note that you may have to register it (an extra complication I've been looking at). https://www.gov.uk/guidance/register-a-trust-as-a-trustee
SIL thought she could ‘buy’ it cheap last year, basically exchanging her 3 bed for this. We said there isn’t a chance as we have to protect the property value and it has to be market rate due to the council ‘charge’ – mentioned deprivation of assets to her – she took the hump, but we can’t sell it ‘cheap’.
The sad truth that happens more often than not, some people will always see opportunity, even if it brings risk to others, we're going to have similar in the coming years, my SIL is not very good at hiding the obvious plan!
for £395 + VAT.
(Valid) arguments about the validness of the advice aside, this is a bit that boils my piss. People who quote their price as £X + VAT can get in the sea. I have to pay the VAT, you know I have to pay the VAT, so give me the final price.
I have to pay the VAT, you know I have to pay the VAT, so give me the final price.
Sounds like a solicitor could do a better job. Happily dodged taxes as my mum gave us her house well before she died but think this loophole is closed. Protecting against care home fees doesn’t really work I don’t think. Council willing to pay for your parent to go-in a grotty care home or spend all the money on a £1000+ a week care home that you’d be happy staying in. Depends if you like money more than your parents.
singletrackworld.com/forum/topic/wills-property-protection-trust/#post-12385534
My understanding is that my property (or future property if I move etc) is held in a trust that means its owned 50:50 between myself and my wife, and the children.
That means that
1. 50% of the value of the property cannot be forcibly sold to fund care costs and
2. should I die, my wife remarry someone who also has kids, then she might die leaving everything to husband #2, and husband #2 (being an evil step parent) might not honour her wishes and cut my kids out.
#1 above seems sensible, but given our ages and scope for the law, our circumstances etc to change doesnt seem like a priority.
#2 seems sensible in theory, but surely this could be avoided by my wife having a robust will created after I die or after she remarry?
To be very fair to Accord, this isnt a strong upsell. Its advice that he is giving us, like any solicitor is likely to do, there is no pressure and we've 2 weeks to mull before we reconvene to finalise.
Depends if you like money more than your parents.
Depends how much they know about it? I'd rather be in the cheap one and my kids have the money if I was so mentally incapacitated that I didnt really know where I was. Complex issue, I will give you that, but lots of older people suffer all sorts to avoid spending money that they can afford and would rather tolerate the low cost option then see everything they've ever worked for being used.
Protecting against care home fees doesn’t really work I don’t think. Council willing to pay for your parent to go-in a grotty care home or spend all the money on a £1000+ a week care home that you’d be happy staying in. Depends if you like money more than your parents.
This
There will be no inheritance for most of us, I reckon. MiL's lovely care home is well over £1k a week,and my parents house will hopefully be spent on seeing them looked after properly in their dotage. The only way I will benefit is if they both suddenly drop down dead, and I'd rather they didn't.
1) Again there is a care cap of 86k so whats the point of putting 50% of a house it in a childs name, £86k is way less than 50% of the average house price
If you want a decent care home then you will be spending your own money on it, and that might mean you want to spend that money you've "given" your kid - however it will be a complicated process to extract it from them.
If you want to give the money to your kid do it now then they can reduce their mortgage and have a better quality of life now or ket them save it for early retirement.....
2) do you not trust your wife!? You can give the money to you kids right now if not. Do you trust your kids to marry well....?
held in a trust that means its owned 50:50 between myself and my wife, and the children
Splitting 100% into 3 halves for £450 sounds like an awesome investment to me!
The average stats say that most people die outside of care homes
and those that do go into care homes at end of life, don't stay very long
There are of course exceptions, and these are the ones you hear about
My partner and I recently did our wills and used a local solicitor. Our wishes were complex but not massively so, and in fact I would say pretty normal to be honest for an unmarried couple.
The whole thing cost us £300. We were 100% satisfied, and the solicitor was excellent in guiding us through the process and explaining everything.
In true STW tradition, i'd say find a local independent solicitor and use them like we did. Expect to pay for it - you want watertight specialist legal advice, not a freebie
Yeah, now I understand it, you should use a proper solicitor, not a freebie one.
This sounds like the deed of trust set up by my mum. 50% of the property shared with her husband is now in mine and my sister's names, he retains his 50% to do with as he wishes, and can carry on living in the property as long as he wants. If the state comes knocking for care home fees, they will come from his half.
This sounds like the deed of trust set up by my mum. 50% of the property shared with her husband is now in mine and my sister’s names, he retains his 50% to do with as he wishes, and can carry on living in the property as long as he wants. If the state comes knocking for care home fees, they will come from his half.
My guess is that this DoT was set up to get around IHT limits before they introduced the spousal transfer thing a few years ago.
Not for care home costs.
Yes, my FiL did some sort of trust thing a while back when his wife died (via deed of variation). In principle what happened is that the children inherited her half of the house, but there's an irrevocable loan back to FiL for him to use as he sees fit, repayable on his death. It was only a year or two later that the spousal transfer and/or additional house allowance was introduced that made the whole thing irrelevant.
I don't know whether it would make a difference in the case of care home fees but it's unlikely they would be enough to matter (in that he would be unlikely to burn through more than his half of the house plus all his savings).
Average stay in a care home is under 2y, so that's up to maybe 100k, which would make a dent in an inheritance, but certainly wouldn't wipe it out for a typical house even without additional savings. Of course there are some who do end up paying a whole lot more, it's a lottery.
BTW the much touted "care cap" isn't what some of you may think it is, it's a con and won't protect many. Most of the care home costs are not capped by this and can mount up indefinitely.
So what happens with care-costs once the money has run out. Do they get hoofed out of the nice home you want for them into Council care?
Or do they put the squeeze on family?
Just asking as my parents are 86 and 82 - neither are in care (yet!). The wife and I have a few quid, but not mega amount, put aside for our own retirement (we're both mid 50s). Will a Council try and take this too?
That was it, deed of variation, not deed of trust. Exactly the same arrangement. I don't think it can be challenged by a local authority, as half the asset has passed to us. And as you say, it's likely that the other half will take care of any fees. At what point they can force the sale of the property if he is in residential care I don't know.
The wife and I have a few quid, but not mega amount, put aside for our own retirement (we’re both mid 50s). Will a Council try and take this too?
How can they? It's not your parents' asset.
I think councils will usually place a charge on the house that will come out of proceeds when it's sold. Though it may vary locally. Not actually been in this situation.
The local authority can charge if they deem "deprivation of assets" but I think you are right that a deed of variation to a previous will won't count. That's more to cover a sudden "gift" when someone gives away their house and claim poverty rather than sell it.
How can they? It’s not your parents’ asset.
Dunno! That's why I'm asking - I've heard anecdotally that they pile-on the emotional blackmail to squeeze a few more £££s from families.
Muffin man. If in a private home and money runs out your bags packed and your out.
If I end up totally crackers dribbling in a chair I hope my friend overdoses me. We have a pact. Yes it's illegal blah blah blah. Try and control your death if life's not worth living.
Massive difference between self funded private homes and council funded. If you 're paying it's your choice, if you don't like it you can move to somewhere you like. Ditto at home care packages, self funded you can complain, go elsewhere, increase hours, decrease hours, choose times and carers to some extent.
Also, big difference between care costs north and south. Nw England we pay 37k pa, care home not nursing, in reading my mate was paying 60k pa 5 years ago.
Private care is a business, if you have the money you can pretty much have what you want.
Yes op they can have benefits as set out. My parents did something similar so I that when dad died a few years ago his half the house came to my brother and I but not immediately, it passed to a trust managed by us and mum. I could be wrong on the details, I trusted dad, mum and my brother so left the details to them. This meant my brother and I couldn't be silly and try and force mum out the house and sell up, while also meaning she couldn't remarry or rewrite her will in a way that stopped my brother and I accessing the half the house dad wanted us to have, when mum died too. There is also some thought that should mum need residential care, dad's half the asset is now my brother's and mine, not mum's, so we choose how is used not the government.
We actually chose to disband the trust and got that done by our solicitor along with a few other bits as the probate and will etc was dealt with. It made a few things less complex, like mum selling and moving house, and we felt the risks it was set up to mitigate were pretty small.
So, yes a trust can be a sensible option but it may benefit you not to have one. A decent family solicitor should explain the cons as well as the pros, and let you decide.
We actually chose to disband the trust and got that done by our solicitor along with a few other bits
+1
Word to the wise. If anyone else has one of these running now, do yourself a favour and bin it before your parents croak. It'll save you a lot of costs/hassle in the long run.
