Assets of incapacitated person- can we protect them?

[dan212]

Hi, my farther has recently suffered a stroke. He is now bed bound and back at his house where my mother and I also live. We have been informed that if his health becomes worse he may need to be transferred into a care home. Our aim is to find a way where his house will not be used to fund his care home fees and to secure his assets basically from any other occurrence. Is there any way of avoiding this without being accused of Deprivation of assets? e.g., maybe a Deed of gift, remortgaging or renting??
We are also looking to buy and move to a more adaptable house in the near future.


Any help will be much appreciated

dan

[Editor]

It is possible for your father to gift the house to you and he then becomes a tenant for life. This will cost in the region of £500 for a solicitor to deal with it for you.
The problem is, if you do this now and your father needs a care home shortly, there is a possiblity the council can win the arguement that you did this purely to avoid losing your assests, which of course you did, and still claim the asset, or at least your father's share of it - presuming it's in both parent's names.
The other downside to this is when you fix a transfer price, any gain after that and the time you come to sell is subject to capital gains tax, whereas if the property was inherited by you on death in the normal way there's no CGT if you sell.
A better strategy may be to purchase another property in your own name and agrue that you manage things for your father.
These are just a few pointers, but you need some expert advice here. I would recommend you see a solicitor with knowledge in this area.
You are likely to find a good property specialist solicitor here:
http://www.landlordzone.co.uk/dir/solicitors-legal.htm

[jonblair123]

"Any help will be much appreciated

dan"......


What progress did you make Dan?.....any hints and tips will be much appreciated.

As far as I can find out, If you gift the house to anyone, but still continue to live in it, it is a gift with reservation, and IHT will apply.

You could live there, but have to pay full market rent for the house, on which you will have to pay tax as a rental income. I dont know how you would fare if paid for only one room as a rent a room scheme!

Either way, when you come to sell, CGT will also apply to you (difference between what it was worth when gifted to you and selling price, with various CGT allownances).

[jonblair123]

I have yet to notice anyone buying in a Trust. Why is this so? What are the pro's and con's when it comes to a Trust or a Pty?

I buy in a trust in another country as the benefits come into play when in situations like this. Should the court try claim the assett in order to help your dad they would not be able to if it was bought in a trust. It is a great way of 'owning nothing' but 'controling everything'.


It would be interesting to know a bit more about this scheme of trusts.....especially how much they cost to set up and annual running costs.....how safe are they especially since theyre abroad....I mean is it possible for somone to run off with you money! etc. etc...

[jonblair123]

Hi


If you are interested I can do some research and find the article I read again. Just let me know.

Regards

Hello, yes it would be a good idea....lets see it.......