Do you want your home and wealth to go to your children and other loved ones? Have you ever considered what the effect might be on your savings and investments, or even your home, if you ever needed residential care later in life?
Most people assume that their assets will pass on to their children or other relatives in due course, yet this may not always be the case unless careful arrangements have been made to protect these assets from being taken to pay care home fees.
Thanks to advances in medical science and a general improvement in health and fitness, everybody is living longer, though not necessarily able to take care of themselves. Figures show that 1 in 2 women and 1 in 3 men will require long-term residential care at some point in their lives.
Currently, anyone with assets in excess of £23,250* (this includes the family home) may not be eligible for any state help with their residential care fees. The result is that anyone who owns their own home is unlikely to receive any assistance, and in fact that home will most likely have to be sold to fund the care.
Average residential care fees are in excess of £700 per week, with many homes in the South East costing nearer £1,000 per week, so it is clear how quickly the value of an estate can be eroded. 22,000 homes were sold in 2010 to fund care (60 a day). Source: National Assistance (Sums for Personal Requirements and Assessment of Resources) Regulations (Amended 2011) (England).
There is a way, however, that this situation can be challenged. A Protective Property Trust (PPT) can be established which will help to protect your estate from being taken to pay for care home fees.
The Property Trust can only be created whilst both partners remain alive. Normally with couples the property is divided 50/50, though these percentages can be different. Upon the first death, their share of the property is placed into the Trust to be administered by the Trustees.
The Will also specifies who is to be the ultimate beneficiary of this share in the property and this would normally be the surviving children of the deceased. The surviving partner, under the terms of the Trust, has the right to remain living in the property for the rest of their life. On the death of the second partner the Trust comes to an end and the property passes absolutely to the beneficiaries. The surviving partner does not own the deceased's share of the property.
If the surviving partner chooses to sell and move to another property the proceeds from the sale can be used to purchase the second property and the terms of the Trust remain over the second property. If there is any excess capital following a sale then the money is invested and the surviving partner can take the interest that is generated as an income.
The deceased's share in the property is fully protected for the beneficiaries, so even if the surviving partner remarries, the children's inheritance is protected. This last point can be of particular interest to couples who have come together and have children from different partners. A PPT can help each person in a relationship ensure that their children inherit their share of the property, while giving their surviving partner the ability to live in the property for the rest of their life.
Our trained Consultants can assess your current circumstances and recommend the products that will provide the correct protection for you, your family and your assets. Get your free information pack today, or contact us for more information.