Warning over ‘trusts’ promising to cut care fees
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.”