Everybody wants to protect their assets for the benefit of their loved ones, to ensure that the assets that they have worked hard to acquire during their lifetime, are passed on to their children and chosen beneficiaries after their death.
With rapidly increasing property values, for most people their largest asset is now their home.
Clients usually wish to continue living in their home but are concerned about how their property, or its proceeds of sale, will be used upon their death. In addition, many are concerned about the effect of having to meet the cost of care, and about the impact that will have on the amount of money they end up leaving to family and friends.
Home Protection Schemes (Lifetime Living Trusts) are designed for homeowners and involves the transfer of their home into a Trust. In practice, there may be several reasons why transferring your home to a Trust may offer valuable benefits, one of which is the option to ensure the home that you have paid for over the years passes to your family and friends as you intend it to.
Other benefits of establishing the Home Protection Scheme include:
- Passing control of your home to your trustees, which includes you.
- Enabling your home to be held for the individuals who cannot hold it themselves – for example, children or disabled persons.
- The ability to protect the value of your home from spendthrifts or keep ownership of the property private or confidential.
- It may avoid the value of your home being included in local authority means testing for residential or domiciliary care.
- It ensures beneficiaries who are going through a divorce or credit problems have the assets protected.
- To speed up the administration of your estate and avoid the need for a grant of probate.
Although not all the benefits will apply to every individual, the impact of just one or two of them may be enough justification to proceed.
Even though the Trust owns your home, you still retain the benefits and flexibility of home ownership; as the Principal Beneficiary of the Trust, you have a guaranteed right of occupation in the property for the remainder of your life. The Trustees cannot evict you under any circumstances.
You can also direct the Trustees to sell the property and to buy a new property of your choice. For example, if in the future you wish to move to a smaller property, you retain the right of residence in the new property and access to the funds released if you want to.
If you lose mental capacity; the law states that you are no longer allowed to manage your own affairs. Assets held within the Trust will then be managed by your Trustees on your behalf. Your Trustees can effectively ‘stand in your shoes’ to make decisions on your behalf but these must be for your benefit. They can add or remove assets or use the income from the Trust to help you and improve the quality of your life.
After your death, the Trust continues to work to protect your assets for your beneficiaries. The Trust can continue to hold the assets safely within it or pay them out to the specified beneficiaries. The Trust is extremely flexible after your death and has the potential to continue protecting your family for 125 years from the date it was created. That means that not only do you protect you and your children, but you can also protect your grandchildren and great-grandchildren.
For expert help and advice, speak to our friendly Will Writing team today. We offer consultation throughout the whole process and with ongoing support to help the management.