Property Protection
Understanding How to Protect Your Property
Residential Care Costs and the 1990 Community Care Act
BEWARE! It is unlawful to deliberately set out to deprive Social Services. If in later life you require residential care, the local authority will carry out a means test to determine your contribution toward the cost of your care. Property, savings and investments will form part of this means test and if these total more than £23,250, you will have to meet the full cost of your care. Unless your care fees can be met from your savings and income, your property will have to be sold at some point to pay these fees. If you are in care longer than 12 weeks, then the proceeds of sale of your property will be used for your care fees. Once your assets have been depleted to £23,250 you will no longer pay the full cost of care, but will pay a diminishing rate until your assets are reduced to £14,250. This means you could be left with only £14,250 and your children's inheritance will be severely reduced.
BEWARE! Some people believe that renting or giving their home to their children protects it from residential care costs. It does not. Legal action brought by Social Services will show that the "gift" is an attempt to circumvent the law, and thus the "gift" becomes null and void. Worse still, if you give your property to your children during your lifetime there could be further unforeseen repercussions, such as:
1. You no longer own the property and may not get it back
2. If your child were to divorce, then the property would have to be sold and the proceeds shared with your ex son-in-law or ex daughter-in-law (and you would be out of house and home).
3. If your child were to get into debt then the creditor could seek to recover the debt through selling the property (and you would be out of house and home).
4. If your child were to predecease you then the property would devolve according to his or her will (and you could end up out of house and home).
Don't risk losing your home through the above - deliberate deprivation is unlawful and will fail. However, during your home visit, your consultant will advise you of your rights and explain what can be done to legally protect your children's inheritance. Learn the facts from a trained legal professional rather than an unqualified friend who mistakenly thinks they know better! Depending on your circumstances, we may be able to improve your position and your children’s inheritance.
How can I protect my home with asset protection trusts in my Will?
There is more than one type of property trust available to protect your property, and each particular trust has its own advantages and limitations. The essence of how property can be protected is explained further below. In order to select and then adapt the best protective property trust to meet your requirements, it is essential to understand your particular circumstances and needs first:
Have you or your partner been married before?
Do you have children from previous relationships?
Do you wish to protect your children in the event the survivor of the couple remarries?
Do you want to protect your partner from being evicted from your home after your demise?
Do you own more than one property?
Are there any disabilities in the family?
The list goes on, but the following explains the process in part, beginning with owning your property as Tenants in Common...
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