long term care financial assessments case updates

We talk a lot about utilising trusts to protect assets and why this matters, but are you talking to your clients about the possible implications?

Our Vulnerable Client Care Team have recently had the following successful outcomes when dealing with local authorities in relation to financial assessments where assets have been settled into trust:

Case 1 - Mr X

Mr X had sold his property and settled the sale proceeds into a Family Investment Probate Trust in 2019. He moved into rented sheltered accommodation following the sale, and six months later in early 2020, he entered long term care following a fall.

A Financial Assessment was completed, and the local authority confirmed that they would take the funds in the Trust into account as a part of the financial assessment. They believed that Mr X was guilty of deliberate deprivation due to the circumstances surrounding the sale.

In correspondence with the Council following the completion of the financial assessment, the Trustees confirmed that the property had been sold as Mr X was unable to maintain the upkeep of it and wanted to downsize. His fall and entry into long term care was a completely unforeseen event. At various points during the correspondence the Trustees were asked to disclose the Trust deed and other information to the Local Authority. We refused to disclose the Trust deed on the basis that it is a private document and they were not entitled to sight of this.

Outcome:

A year on from the completion of the financial assessment, the council have finally confirmed that due to the arguments put forward by us in our capacity as Professional Trustees of the Investment Probate Trust, they will disregard the capital that was placed in the Trust by Mr X.


Case 2 - Mrs Y

Mrs Y settled 50% of her property into a Family Probate Trust in 2011. In 2019, Mrs Y entered long term care. A financial assessment was completed, and the council confirmed that they were taking into account the 50% share in the property held absolutely by Mrs Y for the purposes of funding the placement.

In our capacity as Professional Trustees of the Trust, we confirmed to the Council that there was no interest in the property for sale, reversionary or otherwise (as the Council had misunderstood the terms of the trust). Whilst Mrs Y did retain 50% of the property, this could not be of any value when it was not possible to sell the 50% and realise the proceeds. We also confirmed that following the passing of Mrs Y, the Trust would continue as a standard discretionary Trust and the Trustees had no intention of selling the property at any point. This means that there would be no market value for Mrs Y’s share of the property. We reminded that council that this approach was supported by precedent in the form of a case that had already been before the courts (Chief Adjudication Officer v Palfrey (1995).

Outcome:

After 2 years of regular correspondence with the Council, we are pleased to confirm that the correct approach was applied by the council who decided to disregard the 50% share owned in the property absolutely.


These case studies highlight the importance of lifetime planning utilising trusts and using the help and support of a professional trustee such as Countrywide, who have a wealth of experience in these matters. There can be many motivations to settle assets into trust – certainty, or perhaps to hand over control of the assets to the chosen trustees (which may or may not include the Settlor) so that they can be readily and more easily managed for the benefit of the beneficiaries. Settling assets into trust may also mean there is no delay in accessing the assets for the beneficiaries following the death of the Settlor, where a Grant of Probate may otherwise be required where assets are held absolutely. In cases where a Will could be challenged, did you know that a timely settlement of an asset into Trust during lifetime could prevent it from being subject to an Inheritance Act claim on death?

In these two cases, the assets were protected from the cost of long term care and the inheritance preserved for the families concerned.

If you need further help or advice in any of these areas on behalf of your clients, please contact the Vulnerable Client Care Team for further discussion.

Why not attend our BRAND NEW COURSE covering these areas in more detail, next set to be held on Friday the 23rd July 2021 between 9.30am and 1pm: Lasting Powers of Attorney, Deputyship, Financial Assessments and Challenges. For more information or to book your place, please speak to our New Entrants team on 01926 514 390 ext 9170 or newentrants@countrywidegroup.co.uk. 

Written by Countrywide Tax and Trust Corporation Ltd