Probably the biggest worry that people talk to me about is that there will be nothing left for their children to inherit if they need to pay for care later in life. Regardless of how you feel about paying for care it is always important to explore your options.

Many clients approach me regarding putting their home into a Trust to avoid it being used to fund long term care, but this is rarely a viable option. In fact, if you have been advised to put your property into a Trust to avoid it being used to fund care home fees then it is very likely that you have been mis-sold a product that won’t work.

The local authority are wise to such Trusts and should you require care, they simply set aside the Trust as though it doesn’t exist and value your estate with your property included. The onus is on you to prove there was a legitimate reason for creating the Trust that wasn’t anything at all to do with care home fees. For the Trust to work, you would have to fail to disclose its existence at the point of assessment, and in doing so you’ve probably committed benefit fraud.

If we accept that if you may need care at some point and it will need to be paid for then you should be looking at what you can legitimately do that isn’t going to land you in hot water with the local authority, the Tax man or leave disgruntled children.
 
Using a Life Interest Trust in your Will secures half of your property for your chosen beneficiaries.

It does so by you leaving your half of your property to beneficiaries other than your partner on first death but with a Life Interest in the property for your partner. This means that your partner can carry on living in the property treating it as though it is theirs in its entirety including being able to sell the property and buy another in its place.

The person with the Life Interest needs take precedence over the beneficiaries until stipulated within your Will but your share is not owned by them. This means that should they go on to need care only their half of the property can be assessed as a means of paying for it.

Your children will therefore inherit at least half of the value of your property and your partner will be able to afford high quality care. It is a compromise but one that truly works.

For more information on this please do get in touch on 01903 821010 or email wills@nsure.co.uk