Property Protection Trusts

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 2

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) 3

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 Beneficiaries (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

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

10 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

11 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