Honey

[K77 CTR]

Just looking for some advice regarding lasting power of attorney and loving trusts. My dad is looking at LPA and has had a meeting with a company called Honey. I know he can do these via the government websites and not sure why he'd use a company to do it for him. I know they are notorious for rejecting any spelling mistakes but other than that is there a reason to use a company?

Since meeting with this Honey company they have created a discussion around living trusts. Does anyone have any suggestions around these? My mum passed away last year so there would be nobody living in the family home. I don't know enough about them to know whether it would benefit him or not.

I am 100% in support of the LPA for health and finances but not so sure about the living trust.

[Happy Jim]

The LPA’s are £82 each, there is zero complexity about them.

Trusts are really for “complex” estates (in which case seek advice), if he’s going to be under the IHT threshold then probably pointless (unless there are family “issues” the he wants to avoid).

Jim

[K77 CTR]

He will be over the IHT as the house is worth around £450k and he's got investments. There are no family issues. His concern is if he ends up in care and then losing the home if the bills run up. My argument to that would be that we'd sell the house and fund it rather than allowing the authorities to force the sale but understand that by it being in a trust that this couldn't happen?

[omniflow]

K77 CTR said:

He will be over the IHT as the house is worth around £450k and he's got investments. There are no family issues. His concern is if he ends up in care and then losing the home if the bills run up. My argument to that would be that we'd sell the house and fund it rather than allowing the authorities to force the sale but understand that by it being in a trust that this couldn't happen?

Did your father inherit half the house from your mother?

If so, then he also inherited her IHT allowances, so unless he's got investments of over £1.55million, he's got a total IHT allowance of £1million (if he's leaving the house to children / grandchildren)

[WelshRich]

I think this is another miss-selling scheme in the making - My folks recently set up a lasting power of attorney with a firm that were touting for business at a pop-up booth at the local supermarket. They were pretty useless with the LPA but it’s subsequently transpired that they also talked my Dad into setting up a trust. He’s got no idea what it’s about, nor what it’s for and has forgotten most of the conversation he had with them (he’s not as sharp as he was)

No family concerns and my folks will only just scrape over the IHT threshold but mainly because they own two rental properties that they bought for peanuts 40 years ago - So far, all he’s got is a letter from HMRC confirming that the trust has been set up, but no idea of what he is supposed to do with it. My understanding is that if he moves the rental properties into the trust he’ll be immediately liable for a chunky capital gains charge, way more than any potential IHT saving in the future…

[Simpo Two]

WelshRich said:

My folks recently set up a lasting power of attorney with a firm that were touting for business at a pop-up booth at the local supermarket. They were pretty useless with the LPA but it’s subsequently transpired that they also talked my Dad into setting up a trust. He’s got no idea what it’s about, nor what it’s for and has forgotten most of the conversation he had with them (he’s not as sharp as he was)

He or you should contact them and ask for details. There must be some paperwork.

[Mr-B]

You don't say how old your dad is or his state of health but they will be a consideration if he starts moving assets into trust as the local authority are likely to claim self deprivation nullifying the advantages of the trust if he needs care support. If your mum passed last year a deed of variation is still possible which would allow him to put half the house into trust, assuming it was jointly owned, (which may be as beneficial as putting the whole house in trust) but it less likely to be challenged by the local authority since he is not depriving himself of any assets as the trust arrangement is read back as something his wife did upon death so he hasn't given anything up.

The LPA is doable on a DIY basis but things that get missed off are things like access to Wills, discretionary asset management, digital assets, AD's, etc. Not including these restricts the scope of their use.

[K77 CTR]

Thank you for the suggestions and in a way confirms what I was already thinking. Dad is 82 this year and in reasonable health and not forseesing the need for a care home any time soon. Interesting to read about putting mums half of the house in trust but think that may just confuse him.

[loafer123]

Not saying that this particular company is dodgy, but there was a Radio 4 series about solicitors taking LPA control and people losing their houses and contents.

https://www.bbc.co.uk/programmes/m0025vhg/episodes...

Might be worth listening to…

[Happy Jim]

I’d recommend getting the LPA’s done as it is a whole lot easier than trying to do it if he loses his marbles!

[HBelder]

Happy Jim said:

I’d recommend getting the LPA’s done as it is a whole lot easier than trying to do it if he loses his marbles!

And if he does lose his marbles and you have to seek a court order, that will come with the requirement (along with a cost c. 10 times of an LPA) to complete an annual line-by-line account of any expenditure using his funds. Not fun.

After our experience with my parents, we both competed LPAs - one less thing for our kids to worry about.

[Sheepshanks]

Happy Jim said:

The LPA’s are £82 each, there is zero complexity about them.

Trusts are really for “complex” estates (in which case seek advice), if he’s going to be under the IHT threshold then probably pointless (unless there are family “issues” the he wants to avoid).

Jim

They’re not complex, but they’re very laborious.

We managed to do ours, but almost everyone we know has had one or more sent back because they missed some random box. A neighbour brought theirs round recently, after it had been checked by two family members who both have ‘professional’ jobs, and my wife found multiple missing items.

I think you have to pay again if they send it back.

[irc]

Reminded me of this story. Law firm went bust. Apparently many trusts set up to avoid care home fees.

https://www.bbc.co.uk/news/uk-scotland-glasgow-wes...

A Scottish solicitor in my family who works in this area of law said it is near impossible to avoid care home fees via a trust in Scotland. English law may differ.