Planning for Long Term Care with a Property Trust

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In the UK, a property trust can be a useful tool for planning long-term care while protecting the value of your property. But how does this work? Here’s a general overview of how a property trust works in the context of long-term care planning from the team at Swansea Legal Solutions:

Property Trust Overview

  • Setting up the trust: A property trust involves transferring ownership of your property into a trust while retaining a right to live in the property (known as a “lifetime tenancy”). This is typically done with the assistance of a solicitor specialising in trusts and estate planning.
  • Trustee selection: You will need to appoint trustees who will manage the property trust on behalf of the beneficiaries. The trustees can be family members, friends, or a professional trustee service.
  • Protecting the property: By transferring the property into a trust, it is no longer considered part of your personal assets for means-tested care assessments. This means that the value of the property will not be taken into account when determining your eligibility for local authority funding for long-term care.
  •  Lifetime tenancy: With a lifetime tenancy, you retain the right to live in the property for the rest of your life or until you choose to move out. This ensures that you can continue to reside in your home while benefiting from the protection offered by the trust.
  • Estate distribution: Upon your passing, the property will be distributed to the beneficiaries specified in the trust. This allows you to pass on the value of your property to your chosen heirs while potentially minimizing inheritance tax liabilities.

Property Trust Limitations

It’s important to note that there are limitations to using a property trust for long-term care planning. If you require care in the immediate future, transferring the property into a trust may not shield it from being included in the means-tested assessment. There are also specific rules and time limits surrounding the use of property trusts.

It’s also worth emphasising that planning for long-term care and implementing a property trust can be complex, and the regulations surrounding care funding and estate planning can change.

Therefore, it’s highly recommended to consult with a specialist advisor who can provide personalised advice based on your specific circumstances and help you navigate the legal and financial considerations involved in long-term care planning.

Read more here or you can book an appointment to discuss your particular circumstances by calling the team at Swansea Legal Solutions today on 01792 420844.

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