Protecting Your Children’s Equity Inheritance
When a surviving spouse enters long term care, their house must be sold to repay their Equity Release Mortgage. The balance of equity remaining (cash) is assessed to pay for care until just £14,250 may remain for your family.
This is because most couples own their property jointly, so the surviving spouse automatically owns their home which is then totally assessed for care costs, typically £50,000 annually and increasing by up to 10% every year for life.
Couples can protect at least half the cash value remaining in their home (equity) by separating joint ownership. So, they each own half of their property individually. On death of the first spouse, the deceased’s half equity (cash) share is held in a Property Protection Will Trust for children and protected against potential claims.
Some law firms charge up to £5,000+ for high value Will Trusts plus another £2,000 for four LPAs for couples! Remarkably, we provide this high-value legal work for you at no cost*, when you have completed your Equity Release with one of our well-known Independent Specialists Regulated by the Financial Conduct Authority.
Most people do not enter residential care, so each parent’s Will Trust also protects children’s inheritance for up to 125 years following death, against potential threats such as divorce claims, means testing for state benefits, creditors or even bankruptcy.
Equity Release can also help retired singles remain in their homes by releasing funds to pay for their domiciliary care. This often avoids their home being sold to pay for nursing care, so their children may benefit from the remaining equity—especially as house prices increase.
*Optional Government LPA Registration fees (£82 each) are not included. However, we can deal with the process for you at no extra cost.
**Remember that releasing capital from your home may affect your entitlement to state means tested benefits although sound financial management may help avoid this issue