Every Day, 200 UK Citizens Have Their Homes Snatched By The State

To Pay For Their Long term Care

By David Davies 

Every year, 73,000 UK citizens are forced to sell their homes - homes they've worked a lifetime for - to pay for long term care. Like most of us, they've worked hard and paid their taxes, but because they've managed to accumulate assets of more than £12,250 - not a fortune these days - their access to care is means tested.

So heed the warning now - if you're married, a home owner, and your house is worth more than £12,250, then you're at risk of the same thing happening to you - the result of your life's work being confiscated in a heartbeat.

There is something you can do about it however - something that will put your home beyond the greedy clutches of the state - something that is really easy to do, and can be sorted out in less than an hour.
You can take legal advice on making a Will which will help to protect your estate.

To many people, visiting a Solicitor is viewed as a
daunting, expensive, time-consuming process which
they'd rather put off - which may explain why an alarming 8 out of 10 UK adults haven't made a Will and even fewer have made an Enduring Power of Attorney.

So, do I need to Use A Solicitor?

First of all, to be legally valid a Will does not have to have been written by a Solicitor. Provided that it is correctly worded, who actually wrote your Will is completely irrelevant. Furthermore, to be legally binding a Will does not have to be witnessed by a Solicitor either - it can be witnessed by any two competent people who are not beneficiaries or directly related
to a beneficiary. That said, the subject is complex and given the minimal costs involved, taking professional legal advice must be the sensible option and is certainly one we at Age-Net would always recommend.
There are various options and a professional will talk you through them and explain the benefits and potential risks of each.

Mirrored Wills provide married couples or partners with two identical Will documents.
Severance Deeds convert the ownership of your home from Joint Ownership to Joint Tenants in Common. A couple will then each own 50% of the property in their own right. This helps with a wealth of issues such as minimising Inheritance Tax and Nursing Home Fees.
Enduring Power of Attorney can authorise a member of your family to act on your behalf regarding financial decisions should you become ill and unable to make such decisions for yourself, thus saving many thousands of pounds in court costs.

DEED OF GIFT CHECKLIST

Rising property prices and an ageing population are making people think more and more about gifting either the whole or part of the family home to children or close friends (Donee(s)) as a way of mitigating inheritance tax or possibly reducing any amounts payable as a contribution towards Residential Care fees. When considering a possible Deed of Gift of your property to relatives or close friends, you need to consider the implications very carefully.

IT IS VITAL THAT YOU DO NOT MAKE A GIFT OF YOUR PROPERTY IF YOU ARE NOT PREPARED TO ACCEPT THE RISKS AS SET OUT BELOW.

1. Such a gift cannot be revoked, In other words once the Deed has been signed then you cannot change your mind. The property will no longer be your property. It will belong to your donee or to you all as co-owners. If for any reason you wish to sell and move to another property your donee would have to consent to this and sign all the necessary papers.

2. If any of your Donees become bankrupt, their share of the property would be calculated as an asset belonging to them and the Trustee in Bankruptcy could force a sale to recoup outstanding debts.

3. If your donees are married or marry int he future and then subsequently divorce, the house would be calculated as an asset in the divorce settlement and their spouse could claim an interest in your home.

4. If any of your donees are married and predecease you, if they have not made a Will safeguarding your interests, then their share in your home would pass according to their intestacy and possibly to their surviving spouse or children.

5. If for any reason any of your donees need to claim income support or any other social security benefit which may supersede this, then the property would be an asset for the purpose of means testing and they could lose their entitlement. If they are already receiving benefit, then the gift must be declared to the Department of Works and Pensions.

6. If you were to need to avail yourself of residential care for older people at sometime in the future,
then Social Services would only pay for the most basic of care. You would then need to consider whether you have enought savings and capital to pay for this. Would anyone else be able to pay for this for you on your behalf? This should be agreed in advance.

7. In some instances there has been found to be a change of attitude between parents and children
once the parent has gifted over their house. This is often known as the "King Lear" scenario.
In certain circumstances it has been as if the children have received their inheritance in advance and no longer see the need to bother with their parents. This is an unlikely result of gifting your property, but it is one you should consider. You should also consider what you own reaction might be to no longer owning your own home outright.

8. The same thing could happen if the relationship between you as parents and your donees change
and under certain circumstances they may wish to rock the boat and force a sale.

9. If the Donees will not be living in the property, then any rise in value of the property will be a capital gain subject to capital gains tax. Are your Donees willing to pay this?

10. A gift of the whole property would not mitigate inheritance tax if you remained living in the property, as this would be a gift with a reservation of benefit and the Capital Taxes office would then continue to count the value of the family home into the value of your estate. A gift of part of the property only would avoid this.

DAVID DAVIES the Managing Director of Homesaver Wills resides in Mid-Glamorgan in South Wales. He has a wealth of experience in Will Writing, coupled with his partner's knowledge of thirty years in the legal profession. His website can be found at www.homesaverwills.com