As the owner of a small business, I have something in common with many of my clients, employed, self employed, and a few – very few who are of independent means. Ok I have several things in common with them, but in this case I refer to the desire, often unspoken often barely articulated, to provide the best possible standard of living for one’s self and family. At the end of it all, when one is no longer of this world – those of a more spiritual inclination would employ the expression ‘when one has gone to meet one’s maker’ one would like all one’s assets to go to the most important people in one’s life – with almost none of it going to hangers such as the state or the government in the form of taxes and charges some explicit others underhand and to use the vernacular – below the radar.
A rose by any other name.
An achievement of western civilisation is that there is a good chance that almost every one reading this would celebrate his or her 90th birthday, and a considerable proportion might have got the ‘telegram from the queen’ if such things were still about, the pity is that the science of medicine hasn’t caught up with several of the diseases of old age – hence the need to move to a care or nursing home of some description.
In England – as distinct from the other nations of the UK, people with assets beyond a modestly low threshold, currently £21,500 would have to meet the fees for such care personally. The impecunious get a free ride! Most of my clients with a mixture of eloquence; anger; and dismay believe this system to be a assault on virtues of hard work, creating a grave disincentive to save – encouraging fecklessness, and punishing families who have albeit indirectly contributed to the assets which are being depleted to fund the required care. This funding regime often involves a very visible act of disenfranchisement – the sale of the family home.
Decision time in managing your financial assets.
The all important question is this, would it matter to you if your assets were run down to pay for care? For some people, the answer to the question is in negative, for such folk there’s nothing to do, they can carry on and they say in all the best ‘Dear John’ letters and ‘have a nice life’. Most people however, would answer the question in the affirmative. A straw poll of estate planning professionals would reveal that a good half of queries regarding protecting the one’s wealth against the impact of ruinously expensive care home fees are made too late.
As in comedy, the key is timing when protecting your wealth.
While the state perpetrates the grand act of theft against families by forcing them to pay for their care it does believe it or not provide more than ample opportunity to safeguard the fruit of one’s blood; toil; sweat and tears. The key is planning. It’s never too early to plan to pass on one’s wealth to one’s beneficiaries, and as good proportion of the readers of this piece would be around 50 years old, there’s a chance there’d be parents or elderly relatives who’d need to make provisions for their care in old age while protecting their family wealth.
The greater the gap between the date the plans were put in place and the person in question had to go into care, the greater the chance of success. Put another way, the relevant legislation clearly puts an onus on one to plan early – the scope being years rather than weeks or days.
I asked a recent client what her objective in meeting me was, her response could not have been clearer – ‘I see no sense in all my assets been stolen by the state, and my grandchildren [I have 7 of them] leaving university with debts of over £50,000 twice that if they study something like medicine or architecture – I hear the government is broke, but my money, thank you very much, would do far more good in my family than in the treasury’. At the end of our 2 hour meeting, she’s secured her family’s wealth for several generations hence.
Ade Oduyemi owns and manages Maximum Inheritance Specialists. He is experienced in helping business owners and individuals retain wealth in their family using wills, trusts, and inheritance tax avoidance He is an expert at avoiding care home fees.