Homeowners, beware! Without a Property Trust in place, your gorgeous family home could slip away from you and your loved ones. It seems a cruel twist of Fate that you should spend years of your life working to pay off a mortgage on a family home only to have it taken away from you and your children in your later years. That’s what can happen though, if you need permanent care in the future.
It comes as a shock to many families to discover that what they thought was their ‘forever home’ can be taken from them – especially at an already delicate time in their lives when a loved one is physically vulnerable.
According to a survey done by NFU Mutual, between 30 000 and 40 000 people lose their homes each year in order to cover their care fees. Can you imagine losing the home you’ve worked so hard for? Without a Property Trust in place, this could be on the cards.
To be clear, your home will not be used to cover care costs if any of the following people live there:
- Close relatives under the age of sixteen, if they are in your care
- Close relatives over the age of sixty-five if they’re vulnerable or ill
- Your spouse or civil partner
- Your ex-spouse or civil partner if they’re a lone parent
If none of the above lives there, though, your home will be a risk. As a homeowner, you are expected to cover the costs of your own care. Within three months of your moving into permanent care, your home may be counted as capital from which you will be expected to pay the bills.
There IS a way of protecting your home from being seized to cover future care costs. The good news is that, in fact, only one in ten homeowners need to move into permanent care anyway. But If you or someone you love becomes the unlucky one in ten, it’s good to know that the family home is protected by a Property Trust, or a Family Settlement Trust as it’s sometimes called.
To set up a Property Trust, your property needs to be mortgage free, or ‘unencumbered’.
For example, if you owned a family property with your partner that was valued at £400 000 with no mortgage, you could arrange for it to be put in shared trust with your children. That would mean that the house is owned by all of the Trustees, not just you. If the worst comes to the worst and you need to move into permanent care at some point in the future, then only your share of the value of the property would be charged, thus sparing the family home.
It’s worth finding out more – the law can be complicated regarding trusts, so drop us a line we’ll be happy to go through it with you. Wishing you Peace of Mind