LIVING TRUST
Did you know?
·
¾ of those over the age of 60 will
need some form of Long Term care.
·
According to SAGA the average time
spent in care is four years.
·
Local Authorities in the UK force the
sale of around 70,000 private homes to pay for care each year, which is
approximately 200 a day and this number is growing.
·
Typical practices to protect assets,
such as transferring them into children's names etc are routinely reversed as
they can be deemed to be 'Deliberate Deprivation of Assets'.
·
Only the last £14,500 of your assets
is protected!
Why Setup A Living Trust?
A Living Trust is specifically designed to protect
your hard worked for assets during your lifetime and to give you the peace of
mind that they can pass on securely and intact to your spouse, your children
and their bloodline (or other named beneficiaries) after your death.
A Will can only control the assets that you own at
the date of your death and if these are eroded during your lifetime e.g. in the
payment of Long Term Care Fees, there will be little if anything for your
beneficiaries to inherit. With
a Living Trust, so long as it is setup at the right time and in the correct
way, you can 'ring fence' your assets such as your home and your savings.
Key Benefits of a Living Trust
·
Dependent beneficiaries will not lose
their State and local authority funding which they would do if they inherited
directly.
·
Should you enter into a new
relationship after you spouse has died, the Life Trust will also protect your
children and grandchildren from losing their inheritance and Avoidance of the need to obtain a grant of
probate. If you have less than £5,000 outside the LT on your death, many if not
all of the delays and costs typically associated with winding up an estate can
normally be avoided and the assets protected by the Trust can be distributed to
your beneficiaries in a matter of days if desired.
·
Protection against Long Term Care
Fees which are typically £2,500 to £5,000 per month.
·
An LT cannot be challenged on your
death, so if a claim is brought against your estate, it will only apply to any
assets outside the Trust.
·
If you are in business and would like
to safeguard your personal assets from future unforeseen business debts, the Living
Trust can keep them safe. Although this does not prevent you from being
bankrupt it can avoid the assets held within the trust being taken to satisfy
them.
·
You are no longer allowed to manage
your affairs if you become mentally incapable and a special court called the
Court of protection will take control of Assets outside the LT. This is to
protect you from yourself and to prevent the unscrupulous from taking advantage
of you. The LT allows you to choose Protectors who can control your assets
without the supervision of the Court.
Planning
in Advance If planning is done well in advance then the various remedies and
anti avoidance provisions available to the local authority can be avoided. The
question is simply whether the measures taken ensure that assets are not
brought within the financial assessment on entry into care. Until the first
death the family home carries a “disregard” status, therefore any planning
undertaken while both spouses are alive is even more likely to be secure from
local authority attack. If a husband and wife undertake long term planning
while both are alive, their planning will be successful. Risks about the possible folly in gifting the
home to the children. The risks are immense:
Divorce - the home may be the subject of
the child’s divorce settlement. Bankruptcy - the child may go bankrupt and the
house become available to the child’s trustee in bankruptcy.
Pre-decease - if the child
dies before the parent, the ownership of the home may go off in the wrong
direction (eg son or daughter in law).
Sale - the house will be the children’s
to sell.
Finance - a child could attempt to
raise finance on the house.
Pressure - children notoriously
consider the parent to be ready to enter care long before the parent
themselves.
The trust strategy described by this
guide avoids these risks.
ASK FOR INFORMATION 01325 324515 EMP SOLUTIONS
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