The Steele Rose Home Protection Scheme
What is the Home Protection Trust?
Our Home Protection Trust is created to protect your family home and your right of residence within your home. The purpose is to ensure that the property will pass directly to your chosen beneficiaries, after your death, with as little hassle and delay as is possible. It may also remove your home’s value from being included in a local authority means assessment for care home fees.
Requirements of the Trust
The Home Protection Trust is suitable for any person that owns their home free from of any mortgage and that the property has a value of less than £325,000 (£650,000 for a couple who own it in equal shares).
How does the trust work?
A trust is created immediately, and your home is transferred into the names of the Trustees of the trust (a legal requirement). The Trustees may not sell your home within your lifetime however if you wish to move home then the Trustees must sell your home and buy an alternative property at your request.
Should the time come when you no longer need your own home during your lifetime – the Trustees will sell your home and invest the proceeds to produce an income for you.
At the time of death (or the death of the survivor of a couple) the Trustees will close the trust and transfer the property or investments to your specified beneficiaries. The trust property will pass outside of your will and so there will be no requirement to wait for a Grant of Probate before the transfer is made to the beneficiaries.
Limitations of the Home Protection Trust
Should you need assistance with care home fees in the future it is possible that the local authorities will scrutinise the gift of your home into trust. If they can prove that a contributing factor for making the gift into trust was to save on care fees (or avoid paying them altogether) then they may be able to recover the value of the property.
Since your home would be gifted into trust, certain local authority grants for repairs and/or maintenance may no longer be available and so other arrangements may need to be made.
The value of your home will still form part of your estate for inheritance tax purposes (due to the remaining interest in possession).
If the trust continues for ten years the property (or investments) would be valued and added to any capital which had been paid out of the trust within the ten year period. If that value is more than the nil-rate band there would be an inheritance charge of 6% of the trust fund (this potential charge occurs on every tenth anniversary of the trust).