Warn­ing over ‘trusts’ promis­ing to cut care fees

The Sunday Telegraph - Money & Business - - Fame & Fortune - Tele­graph Money Sam Brod­beck

Fam­i­lies are be­ing put at risk by un­reg­u­lated firms that prom­ise to help them avoid care fees and in­her­i­tance tax, lawyers have warned.

With av­er­age nurs­ing care home fees ex­ceed­ing £1,000 a week for the first time last year, fam­i­lies are hav­ing to nav­i­gate the maze of care fund­ing.

Like­wise, as the Gov­ern­ment’s in­her­i­tance tax take keeps ris­ing, there is greater in­ter­est in fi­nan­cial plan­ning that aims to pass wealth on to chil­dren and grand­chil­dren – in­stead of HMRC.

Now lawyers and pro­fes­sional ad­vis­ers are be­com­ing con­cerned that peo­ple are be­ing con­vinced to pay for risky schemes to cut IHT and care fees, such as plac­ing homes into trust.

There are also fears that the com­plex rules in th­ese ar­eas are be­ing over­sim­pli­fied in “high­pres­sure” sem­i­nars, po­ten­tially ex­pos­ing un­sus­pect­ing peo­ple to le­gal ac­tion from coun­cils.

Ar­range­ments that put prop­erty into trust on the death of own­ers have been com­mon­place for decades. But it is al­most un­heard of to do so dur­ing an in­di­vid­ual’s life­time, said Richard Bates of law firm Coole Be­vis.

Mr Bates also warned that in some cases at­tempts to avoid care fees could fall foul of the law.

“If you are go­ing into a scheme with the in­tent of not pay­ing for the full cost of care, and mak­ing the lo­cal au­thor­ity put its hand into its pocket in­stead, there is the po­ten­tial to com­mit fraud.”

Coun­cils can chase for cash un­der “de­lib­er­ate de­pri­va­tion” rules. This is where they can prove some­one has re­duced their as­sets with the in­ten­tion to claim help from the state.

Coun­cils will pick up some or all of the cost of care where the pa­tient’s as­sets fall be­low £23,500.

has seen mar­ket­ing leaflets from Sus­sex firm Thy Will Be Done that en­cour­age con­sumers to set up a trust to “help pre­vent your home be­ing sold to pay for your care”.

Mr Bates warned that putting homes into trust dur­ing your life­time could cause prob­lems with mort­gage com­pa­nies and eq­uity re­lease firms.

Thy Will Be Done sank un­der its debts in July last year. It has since been rein­car­nated as Thy Will Be Done (Spain) and is now run by Paul Black­moore.

He said: “I have fully li­aised with Sus­sex Trad­ing Stan­dards re­gard­ing this mat­ter and I am 100pc con­fi­dent that ev­ery­thing that needed to be done was done and that all as­pects of our trad­ing are 100pc le­gal and above board.”

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