Elderly warned of ‘planning for the future’ advice

Elderly residents in Berwick are being targeted by ‘rogue trader’ equivalents, with regard to asset planning arrangements, according to a local law firm.

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 or trust corporations.

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, in many cases, 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 involving 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. “There are very few people who should be advised to give property away during their lifetime - and no one should be advised to give it away to a ‘trust corporation’.”

She added that the fees charged were “nothing short of horrendous” in comparison to the work involved.

Sanderson 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.”

Anyone can set up and operate as a Will writer or seek to give estate and asset planning advice. Often those carrying out this type of work are not subject to any regulation - although the Law Society and Legal Services Board are currently investigating this to ensure that members of the public are not being placed at risk by unregulated practices.

Ms Hill continued: “We realise people do not often need to see a legal professional, or may be daunted at the prospect. The ordinary person may have far more regular contact with their local bank or building society, but lending institutions to a degree appear to rely on this apprehension to commercially promote their services on the basis that they are friendly and a cheaper alternative to qualified professionals, whereas the truth may often be that they are very much sales and product driven and this compromises the ability to give independent advice.

“We also regularly see cases where the quoted charges are considerably higher than those of a solicitor or accountant.”

She added: “Will local people please, please be aware of this, and make their elderly friends and relatives aware.

“If you have any concerns about planning for the future, then please remember to take advice from an independent, qualified and regulated legal adviser who will address your genuine needs and taper their advice to your relevant personal circumstances. There are several local firms in the area to chose from and often initial appointments to generally discuss matters are arranged free of charge.”

Iain Cameron, a solicitor with The Will Writing Company, believes there is “confusion” about what the Family Protection Trust is for and what it can achieve. He said: “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. As a client retains a benefit from the assets transferred to trust it also has no effect whatsoever on inheritance tax.”

Mr Cameron explained that different 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 said that all applications to The Will Writing Company for trusts were studied by a team of trust administrators to see that they are in the client’s best interests, and that all of the legal work was done by regulated professionals who are bound by the Institute of Professional Willwriters Codes of Practise

“We do refuse to process trusts where they are not appropriate,” he insisted.