Protecting against care home fees?

We were recently instructed on a case regarding a trust that had been set up between our clients (Roger and Jacki Wade) and Universal Wealth (“UW”). Roger had attended a ‘Keep it in the Family’ seminar in Sheffield at the Double Tree Hotel Hilton, hosted by Universal Wealth in August 2015 in which they were introduced to the idea of setting up an asset preservation trust, the intention of which was to preserve the family assets and home to protect them from future care fees.

Useful trusts?

Roger and his wife agreed that these trust arrangements would be useful and our clients proceeded with instructing Universal Wealth to prepare Wills, LPA’s and asset preservation trusts. It is noted that there was little interaction between Universal Wealth and our clients during the document preparation, with no drafts being circulated to the Wade’s prior to the day of signing. Our clients were only given around 30 minutes in which to consider these documents and the trust arrangement prior to signing.

Capital Gains Tax

Roger and Jackie were advised that their interests in their property should be placed into trust and a legal charge was subsequently taken out against the property. Later in 2018 it became apparent when Cohen Knights Solicitors took over the management of the trusts that Universal Wealth was a part of a scam, this prompted our Roger to seek independent advice on their trust instruments from his Solicitor Annie Wright, at which point it was confirmed that upon the sale of their property, a significant charge to Capital Gains Tax (“CGT”) would be payable due to the nature of the Legal Charge. No substantive advice was provided to our clients regarding their CGT liability and the effect of the legal charge when this was put in place. It was submitted by our clients that they would not have proceeded with setting up the trust and the legal charge had they known what the true effects would be.

Removing the charge

By Order of Master Kaye of the 8 February 2022, it was determined that the charge over the property be rescinded and that the registrar should alter the title register to remove the charge and associated restriction which resulted in the CGT liability. This was on the basis that Roger and Jackie had entered into the asset preservation trust and associated actions on the basis of a mistake, in that they had not received sufficient advice and were unaware of the tax implications and CGT liability on the sale of the property at the time of setting up the trust and should therefore be released from this.

The case and issues considered in Wade & Another v Wade & Another are similar to a previous landmark case in which IDR Law were also instructed (Page & Page v Page [2020]), and in which a judgement was also secured.

You can watch Roger tell his story here.