Elderly residents are being targeted by ‘rogue trader’ equivalents, with regard to asset planning arrangements, according to a local law firm.
Berwick-based Sanderson McCreath and Edney Solicitors is warning the public that a number of banks and building societies seem to be “advising” elderly clients to enter into asset planning arrangements, which are then set up by commercial agents.
Gaynor Hill, of Sanderson McCreath and Edney, said: “Their selling point is to protect the client’s home and assets against care home charges and inheritance tax. The target client seems to be elderly people and often in circumstances where this type of advice is simply not relevant. This is nothing short of scaremongering.”
A ‘Family Trust’ arrangement could be put into place resulting in the commercial trust company becoming an owner of the elderly person’s home. “This places the elderly client in an extremely vulnerable position,” Ms Hill explained.
She added that the fees charged were “nothing short of horrendous” in comparison to the work involved.
Sandersdon McCreath and Edney have seen a number of examples of this in recent weeks. Ms Hill said: “I am extremely cross that elderly people are being taken advantage of in this way. If this were a builder or plumber we were talking about they would be the subject of Rogue Traders.”
But Iain Cameron, a solicitor with The Will Writing Company, said that there is confusion about what the Family Protection Trust is for and what it can achieve. “The trust is not set up to protect against care home fees; if it was it would be ineffective as the client would be deliberately depriving themselves of assets purely to avoid care fees,” he said. “As a client retains a benefit from the assets transferred to trust it also has no effect on inheritance tax.”
Mr Cameron explained clients set up trusts for different reasons; assets held by the trustees do not need to go through the expensive probate process before they can be given to named beneficiaries. Or if a client’s child was going through a divorce or was insolvent at the time their parents estate was to be distributed, their inheritance would be protected in a trust.
He added that all applications for trusts are studied by a team of trust administrators to see that they are in the client’s best interests, and the legal work is done by regulated professionals.