Trying to Avoid Care Home Fees? Why You Should Think Twice

Sadly, unscrupulous companies are preying on these concerns by targeting vulnerable older people, in the hope of persuading them to invest in dubious schemes designed to reduce the value of their estates. Can you pass on your estate to avoid care home fees? How can you avoid being the victim of a scam?

Setting Up a Trust to Avoid Care Home Fees

We recently received a call from the son of a 78-year-old woman who had been contacted by a firm calling itself an "estate planning company", offering to protect her home from care home fees.

The caller explained that for £3,000 plus VAT and a £40 Land Registry fee, he could set up a discretionary trust for her. He would transfer ownership of her house to her two sons and they would allow her to live in the property under the trust. If she had to move into a care home, she would not be regarded as owning her own home and therefore would not be required to sell the property once her cash ran out to pay for the care fees.

Luckily her son had called us to see what we thought of the idea and we were able to explain the problems with such a scheme, the main one being that it is illegal to deprive yourself of assets to avoid care home fees. Transferring ownership of your house to family members during your lifetime will not necessarily achieve this.

So, When Should I Be Suspicious?

As a rule of thumb, be wary of anyone who calls you at home out of the blue and wants to talk to you about making a Will or setting up a trust. If you are tempted by their low fees and their offer of discussing further in the comfort of your own home, check out their advice with a local solicitor before you enter into any arrangement with them.

Seven Things You Should Bear in Mind

• Deprivation of assets to avoid care home fees is illegal.
• The more complex your affairs are, the more worthwhile it is getting a legally qualified person to draft a Will for you.
• Will there be any inheritance tax to pay when you die? If so, consider getting legal advice to talk about your options.
• Signing and witnessing a Will is important as, if done incorrectly, it can invalidate a Will in its entirety.
• If you die without a Will or your Will is deemed invalid, specific legal rules will automatically apply (called the rules of intestacy). They determine who will get what from your estate, which may well be contrary to your wishes.
• Review your Will regularly to take account of changed family circumstances, changes in the law or changes to your personal estate.
• Think about where you are going to store your Will once it is signed. Most solicitor firms offer a Will storage service, free of charge if they have drafted the document.

If you have already made a Will or trust and are now worried it may not be valid, please contact Mary McCrorie in our Private Client team on 0117 314 5368.