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Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
Asset Protection
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Asset Protection

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You can plan against the ravages of long term care costs!

You can plan against the ravages of long term care costs!

Published in: Economy & Finance
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Transcript

  • 1. The Facts Every five minutes someone is forced to sell their home to pay for their care.
  • 2. The Facts Your property is vulnerable to Local Authority Assessment
  • 3. Residential Care Fees are typically £2,500 to £5,000 per month Care in your own home is also assessable The Facts
  • 4. Assets/Income at Risk
    • Capital assets in excess of £13,500 per
    • individual are subject to assessment.
    • Income exceeding £21.15 per week may
    • be taken by the local authority towards
    • your care fees.
  • 5. The Rules
    • Community Care Act 1990
    • Health & Social Care Act 2001
    • Deliberate Deprivation of Assets
    • Cannot transfer assets into children's name
  • 6. The Declaration
    • I am aware that if I dispose of, or have disposed of any of my capital assets, property or investments the County Council may take account of those resources as if they were still mine and charge accordingly.
    • I also understand that the County Council reserves the right to reassess and backdate charges should any undeclared assets be discovered
  • 7. The Solution Protect your property with an Asset Protection Trust so that only you and your beneficiaries have access. Asset Protection Trust Asset Protection Trust
  • 8. The Solution Asset Protection Trust Asset Protection Trust
    • You remain in control at all times and you are
    • free to move, sell, downsize or reverse at any time.
    • Property held in the trust can bypass probate and is
    • not subject to claims on your estate.
  • 9. Recommendation
    • Properties below IHT Threshold (£312,000 per
    • owner 08/09) in to an Asset Protection Trust
    • Cash / investments exceeding £13,500 to a Life Assurance
    • Investment Bond which is not assessed for capital or income purposes
    • but allows you accessibility to income and capital at all times
    Life Assurance Bond + Asset Protection Trust Asset Protection Trust Bank Account £13,500 max.
  • 10. A Life Assurance Bond is not assessable for long-term care fees if established correctly
  • 11. Example Mr & Mrs Brown House - £200,000 Savings - £ 50,000 Total - £250,000 No IHT Payable but...... £236,500 Vulnerable to Local Authority Assessment.
  • 12. £250,000 estate protected from care fees within the Trust and Life Assurance Bond Mr & Mrs Brown Asset Protection Trust Asset Protection Trust Life Assurance Bond + Bank Account £13,500 max.
  • 13. Asset Protection Trust Asset Protection Trust The trust is established by severing the joint ownership and creating “Tenants in Common” so that each of you now owns 50% of your home
  • 14. Asset Protection Trust Asset Protection Trust You must always derive a benefit from your Trust and this requirement is satisfied when you live in your home
  • 15. Asset Protection Trust Asset Protection Trust If you go into long-term care then you must still derive a benefit from the Trust and this is again satisfied if your partner remains in the house
  • 16. On the demise of the first party their share of the home should be placed in a will trust for beneficiaries with a life interest to the surviving spouse. Life Interest Asset Protection Trust Asset Protection Trust Children Grandchildren Future issues Will Trust
  • 17. Life Interest Asset Protection Trust Asset Protection Trust Children Grandchildren Future issues Will Trust These trust assets are then not part of the surviving spouse’s estate but he/she still has full use of the assets and they continue to be protected from means testing for care fees.
  • 18. Life Interest Asset Protection Trust Asset Protection Trust Children Grandchildren Future issues Will Trust This trust affords your beneficiaries protection from sideways disinheritance due to a remarriage and protects your beneficiaries from future divorced partners/creditors. The Trust can also provide considerable IHT savings for grandchildren.
  • 19. Life Interest Asset Protection Trust Asset Protection Trust Children Grandchildren Future issues Will Trust Rental Income Local Authority If you then go into care and there is no partner at home you must continue to benefit from the Trust and so you must either rent out the house - the capital value remains protected but not the rental income which the local authority may claim…
  • 20. Life Interest Asset Protection Trust Asset Protection Trust Children Grandchildren Future issues Will Trust … or sell the house - the capital value remains protected but the investment interest may be claimed by the local authority Interest Local Authority
  • 21. Asset Protection Trust Asset Protection Trust Children Grandchildren Future issues Will Trust On the second death the surviving partner’s property should be paid into a Will Trust in the same way as the first partners Will Trust Children Grandchildren Future issues
  • 22. Children Grandchildren Future issues Will Trust
    • Benefits of
    • Discretionary Will Trusts
    • Ensures benefit through blood line.
    • Protects your beneficiaries from estranged partners.
    • Protects your beneficiaries from creditors.
    • Protects your beneficiaries from loss of means tested
    • state benefits.
    • Provides IHT savings for grandchildren.
    Will Trust Children Grandchildren Future issues
  • 23. Example
    • John leaves his house share valued at £150k in
    • a Will Trust, after his wife’s death, to his three
    • children. Paul, Simon & Jane.
    • Paul has marriage problems...
    • and is going through a divorce.
    • Simon has money problems...
    • and is going through a bankruptcy
    • Jane has health problems...
    • and is in receipt of State benefits
  • 24.
    • By leaving his estate for his family in a Will that incorporates a Discretionary Trust...
    • ...Paul’s wife has no claim on the inheritance.
    • ...Simon’s creditors have no claim on the inheritance.
    • ...Jane can continue to receive state support and use the inheritance for extras – holidays etc.
    Will Trust Planning
  • 25. Asset Protection Trust Asset Protection Trust PROTECTED Life Assurance Bond + Bank Account £13,500 max.
  • 26. Asset Protection Trust Asset Protection Trust Costs – vat inclusive Asset Protection Trust £2,000 Will Trust £ 495 + Children Grandchildren Future issues Will Trust

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