We can provide tailored Lifetime Trusts to suit individual circumstances including Heirloom Trusts, Policy Trusts, Pilot Trusts, Charitable Trusts and Lifetime Property Trusts (‘Lifetime Trusts’ are provided in association with other professional organisations). These are generally not expensive to establish and are valuable estate planning tools. Contact us to discuss your requirements and these services.

 

 

Summary

By giving your house to a Trust in which you and your family are beneficiaries you can PROTECT YOUR PRINCIPAL ASSET –

 

·         exclusively for your chosen beneficiaries

·         from being squandered by irresponsible beneficiaries

·         for young or disabled beneficiaries

·         against bankruptcy, divorce and remarriage of your beneficiaries

·         from being sold to cover the costs of long term care in later life; and

·         for you to continue to live in your home for as long as you wish.

What does the Home Protection Scheme involve?

 

For most people, ownership of their home does not always mean they are wealthy at least not in the sense of having money to spend.  Even with rapidly increasing property values home ownership usually revolves around practical issues such as having a place to live or an inheritance for children or grandchildren. 

 

The Home Protection Scheme is designed for homeowners, usually those who live on their own but also applicable to couples, it involves the transfer of your home into a Trust. 

 

In practice there are a number of reasons why transferring your home to a Trust may offer valuable benefits, one of which is to ensure the home that you have paid for over the years passes to your family and friends in accordance with your intentions.   

How does it work? 

 

Under the terms of the Trust you, as the person(s) creating the Trust (the settlor(s)) are also the beneficiary(ies) so that, once the Trust is created, you can continue to live in your home for the rest of your life or until you decide that residence is no longer required or not appropriate.

 

Despite the fact that the Trust now owns your home you still retain the benefits and flexibility of home ownership. For example, if in the future you wish to move to a smaller property you retain all rights of residence in the new property.

 

What are the benefits? 

 

The principal benefits of establishing the Home Protection Scheme include:

 

·         Passing control of your home to the Trustees, which will include you

·         Ensuring that your home will pass to those individuals you wish to benefits at a time selected by you - for example, when you die

·         Enabling your home to be held for individuals who cannot hold it for themselves - for example, children or disabled persons

·         The ability to protect the value of your home from spendthrifts, delinquents, bankruptcy, divorce and remarriage amongst your beneficiaries or keep ownership of the property private or secret

·         It may avoid the value of your home being included in a local authority means test for residential or domiciliary care

·         To speed up the administration of your estate and avoid the need for a Grant of Representation and the not inconsiderable costs of Probate.

 

Although not all of the above reasons will apply to every individual the impact of just one or two of them may be sufficient justification to proceed.

 

Key facts about the Home Protection Scheme

 

The Home Protection Scheme is designed for individuals or couples elderly or otherwise who wish to continue living in their home for the rest of their lives but are concerned about how their property, or its proceeds of sale, will be used on their death.

 

Before establishing the Home Protection Scheme there are a number of issues that we recommend you consider:

 

a)       Individual circumstances vary a great deal and it is impossible to state categorically whether this, or any other method of estate planning, is best for you without carrying out a thorough review of your affairs.

 

b)       You should always discuss your plans with your immediate family on whom this will have the greatest impact, i.e. the beneficiary(ies) of your estate.

 

c)       In the future if you need long term care and have previously placed your home in Trust, the right of residence will usually be replaced by the right to receive an income (if your home was to be let).  This income will be allocated towards the cost of care, although the capital value of your home will usually be disregarded.

 

d)       If, having moved into care, it is found that you have deliberately deprived yourself of resources (including your home) you can be considered as still having those resources and the local authority will calculate your entitlement accordingly. This would include the establishment of the Home Protection Scheme.  The timing of the disposal of an asset has to be taken into account.  While there are no hard and fast rules, the longer the period between the transfer of the property to the Trust and the need for care, the lower the likelihood that 'deliberate deprivation' can be proved.  In other words do it at the earliest opportunity.

 

e)       Of course, you could simply give your home to members of your family without the use of a Trust.  However we strongly recommend that you do not do this because:

 

a.      Once you have given your home away it is no longer yours and you lose control over it.  Your family could sell the property without your knowledge

b.      If the recipient was your son or daughter and they were to divorce, or die before you or become bankrupt, the security of your home and your tenure would be threatened.

c.      The new owners could pressure you to enter residential care sooner than you wanted to or thought necessary.

 

All these pitfalls can be avoided by use of the Home Protection Scheme.

 

f)         Finally, if you proceed with the Home Protection Scheme you would become ineligible for some local authority grants for repairs/maintenance to your home.  These are mainly improvements to assist an infirm or disabled person to continue living in their home. 

 

The next step

 

If you are concerned about the effect that having to meet the cost of residential or domiciliary care will have on the amount of money that you leave to your family and friends you may wish to consider the benefits available through the Home Protection Scheme.

 

If you would like to know more about the Home Protection Scheme or any other of our products and services please contact us.

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