Care homes and protecting family assets - Any advice?

Care homes and protecting family assets - Any...

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I lost my dad a few weeks back and my mum is now stressing about losing the house etc if she has to go into care (she is a very sprightly 72 year old but I think the whole thing with my dad has shaken her up a bit). One of her fiends' son organised a Trust of some sort in which she signed over the assets (house certainly and possibly investments?) to the sons and daughters so that these could not be taken if she had to go into care. From what my mum says, there needs to be a period of 7 years between the trust being set up and going into care for it to be effective, but to be honest I am totally dense when it comes to money. I have done a bit of research but am not really any the wiser. Do you know whether what mum is talking about is viable, and what are the likely costs of setting it all up? Also, if she signs the house over to us, would there be any tax implications for my sister and I? 

Any advice, would be greatly appreciated.

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By frustratedwithhmrc
25th Jun 2012 17:26

Sorry, but your friend is confusing two issues

The transfer of assets to children during the 7-years prior to death provides a measure of protection from inheritance taxes. This is what is known as a Potentially Exempt Transfer.

If the person whose assets are transferred requires treatment in a care home (which is after all paid for by taxpayers), then the above transfer might reasonably be described as a deliberate deprivation of assets in order to avoid paying for care.

Age Concern have a reasonably detailed pamphlet on the subject:

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

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Replying to Duhamel:
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By KarenCCarr
25th Jun 2012 23:52
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