In an alarming trend, an elderly couple in their eighties were enticed by an offer from a tax and estate planning service that reached out to them unexpectedly. This service promised to safeguard their estate from future care fees by establishing a trust fund. Complicating matters, one of the partners is battling dementia, raising significant concerns about the legitimacy and ethics of such advice.

The allure of protecting one’s estate from care fees is understandable. However, this approach is fraught with legal and ethical issues:

1. Mental Capacity and Legal Consent:

The presence of dementia questions the ability to lawfully consent to such financial arrangements.

2. The Issue of Asset Deprivation:

Setting up a trust to avoid care fees might be viewed as intentional asset hiding, something local authorities scrutinize and often counteract by demanding the dissolution of such trusts.

Trust funds have been a cornerstone of financial planning for centuries, demonstrating their utility in various contexts, from charitable endeavours like the Dick Whittington Trust to inheritance tax planning. Despite their potential, using trust funds as a mechanism to dodge care fees, especially in one’s later years, is ill-advised and likely ineffective.

In navigating the complex landscape of financial planning, the golden rule is to avoid making decisions based on advice from unsolicited sources. Instead, engaging with certified and reputable financial advisors, such as those affiliated with the Society of Trust and Estate Practitioners (STEP), ensures informed and ethical decision-making.

In summary, while the prospect of safeguarding assets is appealing, it’s crucial to approach such financial decisions with caution and seek advice from credible and experienced professionals. Trust funds, when used appropriately, can serve various beneficial purposes, but they are not a panacea for avoiding care fees. Always prioritize consultations with trusted advisors to navigate the intricate world of financial planning effectively.