Elderly People Scam – Who Can You Trust?

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Forbes Solicitors have recently been receiving an increase in the number of enquiries from clients saying that they have been approached by door-to-door sales people advising them to set up an Asset Protection Trust which will “guarantee” that they won’t have to sell their home in order to pay care home fees.  The cost of setting up one of these Trusts is being quoted in the thousands of pounds.

More worrying is that when our savvy clients suggest that they run it by their Wills and Probate Solicitor first, the sales people are claiming that “Solicitors don’t understand Trusts and don’t know how to set up a Trust properly”, and people are being told that there is a deadline by which the Trust needs to be set up; forcing them to commit to spending large sums of money without having had the chance to consider all the options. 

So, what is an Asset Protection Trust?  Asset Protection Trusts come under a multitude of names but all have a similar effect.  For example when a parent transfers the home into a Trust and gives themselves a right to remain in the property for life.  On the death of the parent(s) the property passes to the children.  The theory is that as the parent no longer owns the property, it’s now owned by the Trustees, when the parents enter into residential care the property won’t be taken in to consideration during means testing and is then “safe”.

Will the Trust protect my asset?  Unfortunately, the rules that govern the local authority state that in some circumstances a person will be treated as owning or possessing an asset even when they don’t actually own it because they have “deprived” him or herself of the asset in order to reduce the care home charge.  Therefore, if the local authority can prove that the significant reason for making the transfer was to reduce your liability to pay for your own care home fees, then they may still either charge the recipient of the asset (i.e. the children or Trustees) or register a charge against the property.   As to whether the local authority will be successful or not when claiming that a deprivation has taken place, will depend wholly on the circumstances at the time of the transfer and the reasons as to why it took place.

It should also be borne in mind that if you do successfully transfer your assets and ultimately end up needing the services of residential care, if you have no money to pay for that care you do not have the choice of who provides the care.  If the local authority are paying, it is their choice which home you go to. If you do not have the means to pay for your own long term care, the decision as to which home you go to will be made by the local authority and not by you

There are no guarantees in life and I would advise people to be cautious of anyone who claims otherwise.  There are many reasons why people may wish to put their home and or other assets in to a Trust.

For further information or an initial consultation please call Kirsten Bradley, a Wills, Probate, Tax and Trusts Solicitor at Forbes Solicitors on freephone 0800 975 2463 or contact our Solicitors online today.

This entry was posted in Wills, Tax, Trusts and Probate.

One response to Elderly People Scam – Who Can You Trust?

  1. A MacPherson says:

    Thank you for providing this piece of reality and balance to the plethora of unethical and unscrupulous agents that are peddling these Trusts right now. I can see this next big mis-selling scandal coming a mile away!

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