Financial Leverage Definition, Advantages, and Disadvantages
Asset Protection
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
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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
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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
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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