At the age of 60, however, tragedy struck. Julie died from a heart attack. Two years later the family suffered another blow – Bruce got diagnosed with Alzheimer’s disease.

The family rallied around but eventually had no choice but to put Bruce in a rest-home. Trouble was, rest home care was expensive – $850 per week and that didn’t include any extras such as taking Bruce out for day trips.

The family approached the Ministry of Social Development and requested a residential care subsidy be granted to Bruce. The Ministry told them that before Bruce was eligible for a subsidy, he had to use his own assets as they only granted subsidies to people who had less than $180,000 worth of assets.

This was a real problem – Bruce’s home was worth around $310,000. After much discussion, the Ministry said the subsidy would be granted. The solution was the subsidy would be treated like a loan. So when Bruce finally died, the house would be sold and the loan would have to be repaid back to the Ministry.

Bruce lived for another 6 years in the rest home. His rest home care came to $265,200. By the time real estate agents fees were paid and the loan was paid back to the Ministry there wasn’t much left – only around $35,000.

The sad part about this story is that Bruce and Julie would have wanted their children to have inherited the house. Instead, that inheritance had been lost.

What could have been done to protect against this? Taking some sound professional asset planning advice wouldn’t have gone astray. Putting the home into a Trust before Bruce needed care would have definitely helped.

Anyone wanting to protect their assets and the inheritances they want to leave their children should take steps to implement an asset protection programme, and that includes setting up a Trust and moving assets into that Trust as early as possible.