Property Protection Trusts

2

Standard Wills and the Effect of Care Home Fees

The standard way of owning property is via a joint tenancy

£4000 £160,000 £2000 £6000

Jeremy Their House and Assets Amelia

3

If Jeremy dies then the property transfers by survivorship to Amelia and any solely owned assets are accumulated into Amelia’s estate......

£160,000 £2000 £6K (ISA) + £4K (ISA) + £20K (policy)

If Amelia then dies, the value of the estate usually passes to the children and the house sold...

£160K + £2K (jointly) + £10K (ISA’s) + £20K (policy) + £10k (policy)

4

The Effect of Care Home Fees

Jeremy Their House and Assets Amelia

Beneficiaries (their children)

5

Jeremy Dies. However Amelia is still living in the house they jointly own

Beneficiaries (their children)

Jeremy Their House and Assets Amelia

£160K £2K £6K (ISA) + £4K (ISA) + £20K (policy)

6

Amelia has a stroke and needs to go into care. The Local Authority can include the property now solely owned by her ( and the assets she has inherited from Jeremy) in assessment for ongoing care fees, by placing a charge over the value of the property.

Beneficiaries (their children)

Jeremy Their House and Assets Amelia

£160K £2K £6K (ISA) + £4K (ISA) + £20K (policy)

7

When Amelia dies, the likelihood is that a significant proportion of her estate (property and assets) will have been used to pay for care home and/or care fees. In the worst case scenario.......

7Beneficiaries (their children)

£23,250 (threshold)

Jeremy Their House and Assets Amelia

£160K house £12K Assets £30K policies - £23,250 threshold

8

Jeremy Their House and Assets Amelia

The Effect of Severing the Tenancy

Property now owned as Tenants in Common

£4k (ISA) £2K £6K (ISA)£80K property £80K property

99

Jeremy Dies, however his beneficial share of the property goes into a life interest.

Beneficiaries (their children)

Jeremy Their House and Assets Amelia

£2K £6K (ISA) + £4K (ISA) + £20K (policy) + £80K property

£80K

1010

Amelia has a stroke and needs to go into care. The Local Authority can include the property owned only by her (and assets she has inherited from Jeremy and owned herself) in assessment for ongoing care fees, by placing a charge over the value of the property. However, crucially they cannot include Jeremy’s share which is now in trust.

Beneficiaries (their children)

Jeremy Their House and Assets Amelia

£2K £6K (ISA) + £4K (ISA) + £20K (policy) + £80K property

£80K

1111

So when Amelia dies in care, In the worst case scenario....... The assets used for fees are..

11

Beneficiaries (their children)£80,000 (from property trust)

£23,250 (threshold)

Jeremy Their House and Assets Amelia

£80K house £12K Assets £30K policies - £23,250 threshold