Death trusts and lifeling planning trusts

[Am59]

I can see why more people don't set up trusts. They seem so complicated. We have had a advice about setting up a lifelong trust and a death trust and I'm still baffled and wonder if I need both.
my main sorry now is that something will happen to me before my husband who has Parkinson's dementia. He was recently diagnosed. If that happened all our estate would go in care fees for him and the children would not inherit anything. I would like to at least protect my half. I know we've probably left it too late for savings in my husband's name now anyway. I've been told to sever the tenancy on our home and become tenants in common. Any advice would be welcome.

 

[jugglingmum]

I personally think that you need professional advice about trusts - death or in lifetime. I do agree they are complicated and I don't think people fully understand them when setting them up - some of the trusts I have come across were ill advised. You don't indicate if the advice is from an accountant or solicitor but I think either way you need to use someone who is STEP qualified (society of trust and estate practitioners) - both solicitors and accountants can gain this qualification. Accountants will be more aware of the tax position but you will need a solicitor to draft the documentation.

With regard to the severing of the tenancy, if you don't sever the tenancy and you were to die first it would automatically pass to your husband and then form part of his assets for care.

 

[Am59]

Thankyou. The advice we received is from someone who works for a Solicitor and they've taken advice from them. I just wonder if we need both trusts, death and life planning. Also do we have to pay a Solicitor yearly to be a trustee?

 

[Am59]

If your husband would need that money to pay for his care, why would you prioritise your children?

I don't begrudge my husband being cared for well if anything happened to me first and his share probably would go in care fees as at some point he would need to go into care. They would also take all of his work pension and most of our savings too. I would just like to protect my half for our children if I go first. I'm sure I'm not alone in thinking this.

 

[Shedrech]

hi @Am59
why not simply make a new will yourself
Trusts seem such a heavy handed way of dealing
maybe seek another opinion from a solicitor specialising in work for elders

Solicitors for the Elderly | SFE

SFE is a national association of independent lawyers who specialise in legal services for older and vulnerable people. Find an SFE lawyer today.

sfe.legal

The Society of Later Life Advisers (SOLLA)

SOLLA helps people and their families in finding trusted accredited financial advisers who understand financial needs in later life. A well-qualified financial adviser who is also somebody who understands the plans you need to make for your retirement years.

societyoflaterlifeadvisers.co.uk

 

[nitram]

why not simply make a new will yourself

Tenants in common required to enable OP to gift her share of house.

IMHO trusts generally are only useful for tax purposes of well heeled people.

The rules are changing
https://www.ft.com/content/fc22bb5f-133e-4bf9-8e1c-6dc7ad5aeb3e .

<Strange, I can read that without subscription when I go directly to the URL but not when clicking link, I usually test links in posts>

EDIT
Try a Google search on
Could new regulation spell the death of trusts? | Financial Times
and click on first hit.

 

[jugglingmum]

As I understand it SOLLA are financial advisors which is why I recommended a STEP practitioner - only if you have the relevant qualification will you be recognised as a STEP practitioner.

Trusts are very complicated and if a solicitor or accountant does not have a STEP qualification they won't have enough experience to understand them and explain both the legal and tax implications. There can be significant unintended consequences.

As Nitram says trusts tend to be the preserve of the rich except where they are used for those with a severe disability. I have friends who have set up a trust for their severely handicapped son, although again they did have a reasonable amount of income to be able to divert some into his trust fund.

I think it you have had advice from a friend who works for a solicitor this is tenuous at best.

Any trust whether lifetime gift or set up on death will require annual accounts and tax returns to be drawn up. There isn't a requirement for the solicitor to be a trustee although it is common with a larger trust to have either a solicitor or accountant as a trustee.

You will normally need to engage both solicitors and accountants to set a trust up as one provide legal advice and one tax advice.

 

[Shedrech]

I suggested those links for the more straight forward change of tenamcy and will, having commented that Trusts seem, to me, to be a sledge hammer to crack a nut

 

[Am59]

Thank you for your replies. I was advised to set up a trust as a way to protect my half of the house from care fees should I die before my husband who has Parkinson's and dementia. I know this is unlikely as he is also 13 years older. We have joint wills at the moment so if I went first, my half would go to my husband and would then be swallowed up in care fees. With a trust as I understand it, everything goes into the trust so if I died first, my half would be protected for the children. The council could only take my husband's half. A joint will wouldn't protect my half of the home and our savings from care fees for my husband. I'm hoping I've got that right.

 

[nitram]

If currently the house is jointly owned as joint tenants and either of you die the house will become solely owned by the survivor outside of any will.

Severing the tenancy to tenants in common would enable you to make a will leaving your half to the children.

Severing the tenancy is just a simple form to the Land Registry, it can be done with or without your husband's consent.

If you take this approach a solicitor would be able to sever the tenancy and make a new will containing your wishes regarding the house and other assets.

 

[Sirena]

I agree with Nitram, I can't see what a trust adds to this. If you sever the tenancy and redo your Will so that you leave your half of the house to your children, that resolves your problem. It would mean only your husband's half of the house could be used for his care fees because after your death the other half would be owned by your children.