Does the fact that the Chancellor has raised the married couple tax allowance mean that I do not have to worry about Long Term Care fees?
Absolutely not. The tax allowance in no way relates to the payment of Long Term Care fees. The only way to protect a substantial portion of a family home from Long Term Care fees is by setting up a Trust.
I have a disabled daughter. How can I make sure that she is cared for after I have gone?
By setting up a Disabled Discretionary Trust in your Will you can ensure the continuity of care and security for your daughter. If your daughter was to become a beneficiary of your Will, in all likelihood, she would lose all State and local authority funding. By setting up a Trust this can be circumvented as your daughter would not have an automatic right to receive income or capitol from the Trust, it would be at the discretion of the Trustees so therefore cannot be included in means testing.
Are there still reasons to set up Trusts in a Will?
Definitely. Trusts still have a key role to play in many people’s estate planning, and the Inheritance Tax changes to not alter this. Trusts can be particularly useful if you want to ensure that money is passed directly to children or grandchildren, particularly if they are from a previous marriage and also to ensure that there is money left to pass on. A Protective Property Trust can save a substantial portion of the family home from Long Term Care fees. If a couples total estate is worth over the £600,000, again Trusts can come into play to save tax and a trust can give the ‘right to reside’ or a’ Life Interest’ in a property before passing on to the beneficiaries.
I have lived with my partner for twelve years. Does this new allowance apply to us?
No, unfortunately not, it only applies to married couples and those registered under the Civil Partnership Act. It is very important that you both have Wills and depending on the value of all your assets, it would perhaps be prudent in have a Discretionary Trust written into each Will so that any Inheritance Tax can be mitigated or eliminated.
My husband and I have Enduring Powers of Attorney, are these still valid now that the Lasting Power of Attorney has come into being?
Yes they are, and always will be as long as they have been set up correctly. Unlike the new Lasting Power of Attorney they only need to be registered with the Office of The Public Guardian when the ‘Donor’ (the one giving the power) loses their mental capacity
“It’s never too early to make a Will but often too late” – Jaci
