Asset Protection




Asset Protection


Did you know that 1 in 3 women and 1 in 4 men over 65 will go into care?

And that the Council can take all your assets — including your house — to pay for the care? Only the last £14,500 is protected!

So just think what you could lose!

You have 3 options:-

  1. You could do nothing and hope for the best. This is not what we would recommend.
  2. ou could transfer your assets to your family. By doing this you may protect your assets but you lose control. There are many things that can go wrong with this; your family may have to pay Capital Gains Tax on the asset, they may get divorced or go bankrupt, or simply fall out. Again, we don’t recommend this.
  3. Or you could transfer your assets including your house into an Asset Protection Trust. This allows you to have total control over your assets and helps protects them.

To find out more about Asset Protection Trusts and to get the advice you need, please either call us on the telephone number above or complete our quick enquiry form below, and we’ll call you straight back to help you with your investment questions.

We are ready for your call.

How are your Assets considered for Long Term Care?

  • A Doctor, in conjunction with the family, will decide whether you need long term care.
  • If you need nursing care, the Council must arrange for the care and they must pay for it.
  • The council has the right to try and recover these costs and they may try to do this. It is more difficult for them to recover costs as the assets are no longer in your name, but in the name of the Trust. The Solicitor Trustees will always deal with the Local Authority and respond to any challenge. The CRAG Report (Charges for Residential Accommodation Guide) states that ‘it would be unreasonable to decide that deliberate deprivation had taken place if the deposit took place when the claimant was fit and healthy and could not have foreseen the need to move into residential accommodation’. Therefore the sooner a Trust is set up the better.
  • The Council will fund your care up to their maximum funding rate but the Care Homes normally settle for this amount instead of demanding the private rate.

Apart from care costs, the Asset Protection Trust has other big advantages. It will avoid Executory procedure on your death and save money. If most of your assets are in the trust then there will be no Executory Costs and your estate can be paid over to your beneficiaries without delay, usually within a couple of weeks. On death, estates normally cannot be paid out within the first 6 months, and can take up to two years to complete. Assets in a Trust are paid out immediately.

Even if you have a mortgage on your property which you do not want to pay off, then we can, in some cases, still set up a Assets Protection Trust, as long as the lender agrees.

Some commonly asked questions:

Why is it important? – If the time comes when you do need to go into care, you may find that the assets like your home that’s taken a lifetime to accumulate, can be used for the cost of care rather than going directly to your beneficiaries.

My family will take of me – Lots of things can change in your lifetime – we are seeing more children become dependent on their parents again due to the economic climate – it may never happen but the current fact speak for themselves that 1 in 4 men and 1 in 3 women unfortunately have to go into care when they are over 65.

Will I get any benefit from it? – Like all things in life it is about making a plan for the eventuality – if the result can save you a significant sum in care costs then it is obviously worth it. Saving on expensive legal probate costs will be of value also.

What if I don’t go into care? – Winding up your estate can be costly and time consuming so you will see the benefit by avoiding the in the costs and difficulty involved, in winding up your estate. A solicitor needs appointed when you die to carry out the necessary executory work particularly if the house is in your name and can be expensive. However if you have taken the right steps and you have appointed you home to the Trust then you will find that the Trustees can complete things quickly and efficiently on your behalf.

What is the Solicitors role? – Keeping control as a Trustee will be important for you, so if you need to make any key changes or decisions about the Trust your appointed solicitor will always be on your side providing more peace of mind that you can’t be outvoted.

I have heard that you need two Solicitors – is this true? – If you’re Will leaves your estate to more or one beneficiaries then it is important that there are two Solicitors as Trustees, to outvote the remaining family member Trustee. Otherwise he could take control. With two Solicitors this ensures that what you want to happen after your death will actually happen.

Can I trust the Solicitors? – Solicitors have a duty of care and are bound by the laws of their profession by The Law Society in England and Wales and also The Law Society of Scotland and they cannot benefit from the Trust directly as named beneficiaries.

What are the ongoing fees and costs? – There are NO ongoing fees. With this scheme you pay the fee to set up the Trust at the outset and have nothing further to pay unless you go into care and there is a dispute with the Council, which is very rare.

What kinds of assets can be placed in the Trust? – You are not means tested by the local authority on any capital up to £14500 and is ignored  – you will tend to look first at other assets like your house, we will advice you on what would be best suited to being allocated to your Trust.

Can other assets be added at a later date? – You can, as assets can be placed in the trust at a later although, this will start the 6 month clock ticking on  that particular asset.

Is there any limit on the value of assets placed with the Trust? – The Asset Protection Trust will usually hold assets up to the value of the current Nil Rate Band (£325,000 for the tax year 2010/11) for each client, as any assets in excess of this would create an immediate charge to lifetime Inheritance Tax of 40%. There are however a number of other options to safeguard your assets if 2 Trusts do not cover your entire estate.

When is the best time to set up the Trust? – We would recommend as quickly as possible after you have considered all you options. You will always be under scrutiny from Local Authorities to look back and  review the circumstances in which a Family Protection Trust was set up at any time. You will have less to worry about if it was apparent  you had expectation in entering long term care.

Can I change my mind? – You have control so if anything changes you will have the choice for everything to revert to the way it was in your name only.

Can I move house? – Yes, since you control the Trust you can move house in the usual way except that the deeds are signed by all the Trustees rather than by you alone; but that makes no difference.

What happens if one of us dies? – Nothing. The Trust, and the protection that is provides, simply continues as before until the second person dies. The survivor continues to retain control of the Trust.

What happens if one of us becomes incapacitated? – Nothing. The remaining Trustees simply continue as before. We also prepare Powers of Attorney as part of this process to allow this to happen. Otherwise without this arrangement, the family may have to go to Court to obtain a Guardianship Order which can be a very difficult and expensive process.

What happens if one of the other Trustees die? – A new Trustee is simply assumed in their place.

Who gets my estate when I die? – You will decide you your named beneficiaries are in your Will and letter of wishes. The Trustees will then look to execute your wishes in a timely fashion. Having two Solicitor Trustees ensures this happens quickly and efficiently.

Do I need a Will then? – Yes, Wills are extremely important. Any estate which is in your name when you die will be dealt with according to the terms of your Will, assuming the class of beneficiaries names remains the same. We will discuss this with you when setting up the trust.


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