The property protection trust was sold as a specialist estate planning tool with one clear purpose: to place the family home beyond the reach of care funding assessments, keeping it for the next generation rather than letting it be consumed by care costs. Families were told it was legally sound, professionally managed, and exactly what they needed if protecting the home for their children was the priority.
The people selling these arrangements were not always legally qualified. Many were estate planning consultants, will writers, or financial advisers who had added property trusts to their offering. The fees were substantial. The legal knowledge underpinning the advice was sometimes much thinner than the presentation suggested.
What the law actually says
Property trusts do not provide automatic protection against care funding assessments. Whether they provide any protection at all depends entirely on the specific circumstances of the transfer and how those circumstances are assessed by the local authority carrying out the means test.
A transfer of property made with the purpose of reducing what would be counted in a care funding assessment can be treated by the local authority as a deliberate deprivation. When that happens, the local authority includes the transferred property in the means test as though the transfer had never occurred. The trust structure is simply set aside. The protection disappears.
This rule was part of the law when the trusts were sold. An estate planning adviser who understood the area would have known about it and explained it clearly to any client considering this type of arrangement. An adviser who did not know about it lacked the knowledge needed to advise on this subject properly. An adviser who knew and did not explain it was withholding information a client was paying for.
What happened to families
Families who set up these arrangements and later faced care assessments found themselves in the situation they had specifically paid to avoid. The assessment included the home. The fees were calculated accordingly. The trust produced no benefit at all in the circumstances that mattered most.
The legal and financial consequences were serious. In some cases families spent money on legal challenges against the local authority's position, with uncertain results. In others, the authority's decision went unchallenged because the family could not afford to fight it. The financial loss can be quantified, and a professional negligence claim exists to recover it.
The accountability that remains
The failure of the arrangement and the costs that followed do not simply have to be absorbed by the family. Where the advice that led to the arrangement was professionally deficient, the adviser remains accountable for the consequences. Professional negligence claims arising from failed property trust arrangements are being successfully pursued, and the families who bring them are recovering compensation for losses they should never have incurred.
Failing to explain the deliberate deprivation rules adequately is exactly the kind of failure that has founded successful claims. It is not dramatic or obvious at the time, but it matters enormously when the arrangement is tested and fails in the way that proper advice would have warned was possible.
The rule that could defeat the trust entirely was part of the law when every one of those trusts was sold.
The starting point is a free independent assessment of what happened and whether the advice met the required standard. That assessment is available through Sold Short at no cost and no obligation.
Sold Short helps families affected by failed property trust arrangements access specialist professional negligence solicitors. Free review. No win no fee.
