Money to children now to pay 4 care home later?

[5636]

Would it be possible for my wife & I to give my children say £50K or more, each now.
The main idea would be that it could be used for care home funding (if required) in the future.
From the tax point of view I suppose we would need to set up some sort of trust?

[Tax Champion]

Not sure what the intention is here: if you want to avoid inheritance tax, this will be a PET (potentially exempt transfer) on which no tax is payable if you survive seven years from the date of gift - PROVIDED that there are no restrictions concerning the use of the funds, in which case you cannot be certain that they will be used as you wish. If the money can be used only for your care, you are effectively not giving anything away, and it all remains in your estate.
If you just want to ensure that the funds are available for care home fees in the future, why not simply transfer the money into a separate account, tell your children that this is what it is for, and set up a Lasting Power of Attorney in their favour so that when the time comes they can access the account.
If you set up a Trust you are entering a much more complicated area, with potential tax liability of 50% on the Trust income. If you do decide that this is what you want, take proper advice from an expert to make sure that the Trust does what you expect.

[tax_schmax]

Just to add, if you want to fund nursing care, you can buy plans to do this for you. These have often been endowment style, i.e. if fund growth of X% is achieved, care fees of £XX per month will be available if you are unable to perform at least two activities of daily living, (feeding yourself, washing, remaining continent, ect.)

The FSA see this area as specialist. You should see an IFA with the CF8 qualification (or similar), as only they are authorised to discuss all your available options. If a trust route is appropriate, an IFA would not be the best bet as many rely on basic insurance company forms that might not be suitable. Few IFA's have the experience to be able to tailor these successfully.

[Peter D]

If the gifts have a condition that they have to be used for your care home fees, then this will be a gift with reservation and the value will remain in your estate for any IHT calculation. If you have say three children then the fund is £150,000 yet your care fees could easily be in excess of £30,000 per year, depending on what care you need. As has been said you need professional advice on this and on a face to face basis. We do not know the facts, like are you married, how is your health, what is the size of the estate, how many children do you have, what is the value of your home, do you plan to downsize. There is a lot that needs to be considered. Regards Peter