By Martin Oates, Partner
The recent Budget has shown us that the country’s finances are not in a good state. However careful you have been with your money, you will have to pay your fair share towards balancing the country’s books. But what does ‘fair’ really mean? Does it mean you should take all of your money and give it to the Government? Do you have to accept that your tax bill is what it is and there is nothing you can do about it? Do you have to accept that if you go into care, you just write out a cheque for your fees?
I don’t think you do. Planning properly to maximise the state benefits you get and to minimise the amount it costs you is perfectly legitimate and totally sensible, provided you stay on the right side of the avoidance/evasion divide. Avoidance is legal, evasion is not.
Trust planning is a great way to give money away without losing control of it and can help you or the person who benefits from the trust to legally avoid tax, claim means tested benefits or protect assets
Inheriting money directly from relatives and continuing to claim means tested benefits? That’s illegal.
Inheriting money from relatives within a well drafted discretionary trust arrangement and continuing to claim means tested benefits? That’s fine.
Using trusts to pass money on from one generation to the next without paying tax is legal. ‘Forgetting’ to put what is really there on a tax form is illegal.
Telling the Local Authority you have no money to pay for your care when in fact you have lots in the bank? Illegal. But telling them that you have given your money away for legitimate reasons, even if that money is protected within a trust arrangement, is legal. You are not hiding or concealing anything and you are not telling any lies and it is up to the Local Authority to make what ever enquiries and challenges they wish to make.
You have planned properly to make the most of your life savings for you and your family, and you can’t say fairer than that.
There are lots of planning opportunities available to you. All you need to do is see a good lawyer. An ‘okay’ lawyer will do the job you have set them. A really good lawyer will do that and also ask you all about your personal financial and family situation to come up with other solutions and answers that fit your needs. To find a good lawyer, you don’t have to look that far. Call our specialised team at Poole Townsend on (01229) 811811 to arrange a meeting. The first one is free and then we will send you an outline of what we can do and how much it will cost.