Inheritance question is my father being ripped off?
Discussion
My mother died earlier this year.
As soon as the will was sorted (my father obviously gets everything) He got a call from a solicitors.
Apparently they are ringing around at ramdom seeing if they can help in these matters (what a coincidence!!!) They have told him that if he gets ill(not in the best of health anyway) and has to go in a home then basically the government will take all his cash and he wont be able to leave anything.
but for a 2.5k fee they can set up a trust so all his assets go into that and if he needs to go into care the government cant touch it.
now this sounds incredibly dodgy to me for a start why would they call him out of the blue? do they monitor death certificates? and is this trust thing legit?
just got my nose twitching
As soon as the will was sorted (my father obviously gets everything) He got a call from a solicitors.
Apparently they are ringing around at ramdom seeing if they can help in these matters (what a coincidence!!!) They have told him that if he gets ill(not in the best of health anyway) and has to go in a home then basically the government will take all his cash and he wont be able to leave anything.
but for a 2.5k fee they can set up a trust so all his assets go into that and if he needs to go into care the government cant touch it.
now this sounds incredibly dodgy to me for a start why would they call him out of the blue? do they monitor death certificates? and is this trust thing legit?
just got my nose twitching
Edited by Pesty on Tuesday 23 July 21:37
Inkyfingers said:
Setting up a trust can be totally legit, but the sort of solicitors who ring you up out of the blue and feed you misleading information are probably best avoided.
Thanks.Thats what I told him. but he thinks its a good idea i said he should go see a different solicitor and see first.
is the part about the government not being able to touch his assets not true then? 2.5k seems an awefull lot of money to me.
Ill have another word with him just watching trading standards thing on tv reminded me.
Not my field but I've come across this issue before.
If the "solicitor" - and I say that because I suspect they will prove not to be regulated firm of solicitors - could give your dad a cast iron guarantee that they could put his assets entirely out of reach of the local authority in the event that he had to go into care, £2.5K would be a snip.
I very much suspect however that they will not do so for the very simple reason that they can't guarantee it. The local authority has wide-ranging anti-avoidance and anti-divestment powers which, from what. I understand, it's far from clear that the trust would be effective.
At the very least, check to see whether the "solicitor" is indeed that, and that they are regulated by the SRA. Also ask them what guarantee they can give and what indemnity insurance thy carry.
If the "solicitor" - and I say that because I suspect they will prove not to be regulated firm of solicitors - could give your dad a cast iron guarantee that they could put his assets entirely out of reach of the local authority in the event that he had to go into care, £2.5K would be a snip.
I very much suspect however that they will not do so for the very simple reason that they can't guarantee it. The local authority has wide-ranging anti-avoidance and anti-divestment powers which, from what. I understand, it's far from clear that the trust would be effective.
At the very least, check to see whether the "solicitor" is indeed that, and that they are regulated by the SRA. Also ask them what guarantee they can give and what indemnity insurance thy carry.
Lurking Lawyer said:
Not my field but I've come across this issue before.
If the "solicitor" - and I say that because I suspect they will prove not to be regulated firm of solicitors - could give your dad a cast iron guarantee that they could put his assets entirely out of reach of the local authority in the event that he had to go into care, £2.5K would be a snip.
I very much suspect however that they will not do so for the very simple reason that they can't guarantee it. The local authority has wide-ranging anti-avoidance and anti-divestment powers which, from what. I understand, it's far from clear that the trust would be effective.
At the very least, check to see whether the "solicitor" is indeed that, and that they are regulated by the SRA. Also ask them what guarantee they can give and what indemnity insurance thy carry.
Thank you.If the "solicitor" - and I say that because I suspect they will prove not to be regulated firm of solicitors - could give your dad a cast iron guarantee that they could put his assets entirely out of reach of the local authority in the event that he had to go into care, £2.5K would be a snip.
I very much suspect however that they will not do so for the very simple reason that they can't guarantee it. The local authority has wide-ranging anti-avoidance and anti-divestment powers which, from what. I understand, it's far from clear that the trust would be effective.
At the very least, check to see whether the "solicitor" is indeed that, and that they are regulated by the SRA. Also ask them what guarantee they can give and what indemnity insurance thy carry.
Eric Mc said:
Is Inheritance Tax going to be an issue?
What is the value of your father's estate?
Nowhere near i think. house about 120 to 150k approx 10k savingsWhat is the value of your father's estate?
Eric Mc said:
Gargamel said:
They aren't playing the IHT angle though are they.
It was the "government are going to take his cash" bit that made me think he was talking about IHT.With an estate of that value, IHT will definitely not be an issue as it is well below the threshold.
As he is losing his sight and is in general poor health he was quite worried.
This is quite a specialized area and as such a 'general purpose' solicitor may not know an awful lot about it (My father received some dreadful advice from his normal solicitor on this very subject).
He would be best off talking to a solicitor who specializes in estate planning. Just treat the cold callers like you would any door to door (or telephone) salesman, it's always worth shopping around for an independent price.
I've just sorted this out for my Dad's will. My parents did new wills in 2005 - tenants-in-common, nil rate band to go into a trust on first death, etc - basically an IHT avoidance exercise. They never updated the wills when the legislation changes and the nil rate band could be passed to the spouse.
So, when my Dad died in late 2011, the will said to set up a trust. We thought about whether it was worth it - with northern house prices the way they are, they would struggle to break £325k let alone £650k so IHT isn't an issue. In the end, we decided to set up the trust as it would reduce the size of my Mum's asets if she needs long-term care in the future.
There are downsides (very technie - won't try to explain it here) but it seems unlilkely that those downsides will affect us. The solicitors charged us £500+VAT for setting up the trust - decent high street firm and the same ones that drafted the wills in the first place.
So, when my Dad died in late 2011, the will said to set up a trust. We thought about whether it was worth it - with northern house prices the way they are, they would struggle to break £325k let alone £650k so IHT isn't an issue. In the end, we decided to set up the trust as it would reduce the size of my Mum's asets if she needs long-term care in the future.
There are downsides (very technie - won't try to explain it here) but it seems unlilkely that those downsides will affect us. The solicitors charged us £500+VAT for setting up the trust - decent high street firm and the same ones that drafted the wills in the first place.
The solicitors seemed to suggest it was fairly routine stuff and I had no reason not to believe them. They certainly didn't flag that it might be open to challenge.
A difference might be that this discretionary trust was specified in my Dad's will as a distribution of his estate - i.e. it isn't something my mother has taken upon herself to set up during her own lifetime. My mother gets a loan from the trust (the technical bit might be more detailed than this) rather than receiving the money outright.
A difference might be that this discretionary trust was specified in my Dad's will as a distribution of his estate - i.e. it isn't something my mother has taken upon herself to set up during her own lifetime. My mother gets a loan from the trust (the technical bit might be more detailed than this) rather than receiving the money outright.
As has been touched upon earlier it the local authority who look at care not HMG.
Some trusts can have an impact and protect assets from their oversight, but you have to have reason to set them up before you can make that argument. IHT being an obvious, and reasonable, one for assets in excess of the nil rate allowance.
It is also worth noting that each individual local authority can take a differing view of assessing for costs. There is no overreaching national agreement.
For the levels you have mentioned it is therefore highly unlikely that a trust would be excluded from any assessment on that basis.
In reality there is now very little one can do to exclude care costs from having an impact. Even the insurance against the issue is now no longer available from any reputable mainstream provider, as far as I am aware.
Tell you Dad to keep the £2.5k.
Some trusts can have an impact and protect assets from their oversight, but you have to have reason to set them up before you can make that argument. IHT being an obvious, and reasonable, one for assets in excess of the nil rate allowance.
It is also worth noting that each individual local authority can take a differing view of assessing for costs. There is no overreaching national agreement.
For the levels you have mentioned it is therefore highly unlikely that a trust would be excluded from any assessment on that basis.
In reality there is now very little one can do to exclude care costs from having an impact. Even the insurance against the issue is now no longer available from any reputable mainstream provider, as far as I am aware.
Tell you Dad to keep the £2.5k.
Be careful in this situation, Clearly inheritance tax is not the main issue here it is to avoid paying for care fees. In this case the local authority will look at the assets including anything in trust and if deemed 'deprivation of assets' I.e. put in trust to avoid care fees they will include this in your mums estate.
Admittedly it is a very grey area, however, if your mums health is getting worse I would have thought the local authority would see right through this. I deal with this on a daily basis and it is a hard call to make. I do not know your full situation so hard to make a judgement.
Admittedly it is a very grey area, however, if your mums health is getting worse I would have thought the local authority would see right through this. I deal with this on a daily basis and it is a hard call to make. I do not know your full situation so hard to make a judgement.
Have seen Trust's working first hand for Care Fees.
One I saw had all of the "Family's Wealth" in a Trust that was passed on first Death, this made the spouse effectively penniless. The wording of the Trust however ensured that the Spouse had weekly living costs to the Tune of £100.00 or so.
The second and more recent case I saw was a "Family" house namely the Mother's house being passed to her daughter and suddenly the Mother finished her private funds and then became dependant on the Social Services.
I think as with all things legal if the wording is correct then it cannot be argued with and these "Tools" can be used in a number of ways.
One I saw had all of the "Family's Wealth" in a Trust that was passed on first Death, this made the spouse effectively penniless. The wording of the Trust however ensured that the Spouse had weekly living costs to the Tune of £100.00 or so.
The second and more recent case I saw was a "Family" house namely the Mother's house being passed to her daughter and suddenly the Mother finished her private funds and then became dependant on the Social Services.
I think as with all things legal if the wording is correct then it cannot be argued with and these "Tools" can be used in a number of ways.
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