Asset Protection with The Legacy Protection Plan
ASSET PROTECTION to stop the family home and savings being lost:
Asset Protection with the Legacy Protection Plan has a number of objectives, but anecdotal evidence suggests that anything between 40,000 and 70,000 homes are sold each year to cover the owner’s care fees.
Up to 11% of the value of your home could be lost to Probate fees (with 3.5% being more usual). Relatives or so-called dependants could demand a share of your estate and keep it in Court (expensively) for years. See Jarnddyce v Jarndyce – it is fictional, but not so far from the truth! Asset Protection through a Legacy Protection Plan means the equivalent of Probate (for anything in the Trust) is much faster and less expensive. Days rather than months in most cases. Also the property is not subject to the Inheritance (Families & Dependants) Act 1975 should anyone claim to be a dependent under the Act.
Parents are also seeing nest eggs built up as intended inheritances for their children decimated over short periods once in care, or half of the inheritance or more being taken in their divorce settlement. The Legacy Protection Plan can help with both.
With advance planning this need not be the case. There are ways to protect the family home for the next generation.
This guide highlights the opportunity for planning, briefly describes some of the relevant regulations and suggests a simple strategy to protect the family home.
This is a highly specialised area. Local authorities around the country are experiencing severe financial constraints in funding care. This in turn leads to more aggressive assessment and the failure of steps taken too late. If done too late, these plans won’t work at least as far as Care Fees are concerned, though that should never be the sole reason for arranging one.
ASSET PROTECTION PROFESSIONAL ADVICE.
Professional advice on this type of asset protection is essential. This guide is for general guidance and information only. Specific situations require specific advice and this guide is no substitute for the appropriate advice, which we will provide once we have your initial deposit.
WHAT IS THE LEGACY PROTECTION PLAN?
The Legacy Protection Plan is a strategy designed primarily for homeowners, whether single or couples, to put the home and other assets beyond the reach of contributing to care fees and to achieve one or two other benefits set out later in this document.
The strategy involves the transfer of the home to a trust. Under the trust, the settlor (the homeowner) is also a beneficiary so that once the trust is created he, she or they can continue to live in the home for the rest of their life or lives or for as long as is wished, on a guaranteed basis. The trust gives a guaranteed right of residency and security of tenure for life or until the point where continued residence in the home is no longer required or appropriate.
The trust would be the new owner of the home and therefore the home should no longer count as a capital resource. Despite the fact that the trust now owns the home, the former homeowner(s) still have flexibility. As well as rights of residence and security of tenure, there is the flexibility to move to a smaller (or cheaper) property and to retain all rights of residence and security of tenure in the new home.
Asset Protection with the Legacy Protection Plan.