Signing house over to children before care

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  • Fester_2
    Fester_2 Posts: 22 Forumite
    Bossyboots wrote:
    You can do it without even using a solicitor if there is no mortgage. The form (TR1) is on the Land Registry website.

    Cheers BB.

    Found the form and will have a think.

    So I presume if you add childrens names onto deeds , the property cannot be sold to pay for any home fees?

    I mean they cannot enforce selling a property that is owned by others as well as person requiring residential/nursing care?

    Or if you are say, one of four names on the deeds, can they take into consideration that you have wealth to the value of 25% of the property and take that into account in their calculations?
  • Bossyboots
    Bossyboots Posts: 6,746
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    Fester wrote:
    Cheers BB.

    Found the form and will have a think.

    So I presume if you add childrens names onto deeds , the property cannot be sold to pay for any home fees?

    I mean they cannot enforce selling a property that is owned by others as well as person requiring residential/nursing care?

    Or if you are say, one of four names on the deeds, can they take into consideration that you have wealth to the value of 25% of the property and take that into account in their calculations?

    No it doesn't work that way because you will be making a gift with reservation and consequently the whole property can still be deemed to be yours. This is also deprivation of assets and a charge for the value of the nursing home fees can be put on the property to be recouped upon any sale.

    If there is a long time between the signing over and a care home needed, then your position is stronger but if you died within 7 years of executing the transfer then IHT is also payable under the gift with reservation rules if you still live there.

    You also must consider the point raised here about spouses and divorce. A spouse will be entitled to make a claim against the property. My elderly, disabled former neighbour is a prime example of this, that is why she is now my former neighbour.

    Also, what if one of the children became bankrupt?
  • Torry_Quine
    Torry_Quine Posts: 18,827
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    You must get a solicitor involved to get the house signed over legally. If the elderly person goes into care the local authority can still treat the property as if it was still belonging to them but the longer that has passed the less likely this is. there is no time limit for this, it is up to individual councils to make up thier own rules which is unfair.:
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  • HOWMUCH
    HOWMUCH Posts: 1,296
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    This happened to my Dad when it looked like my Grandad would have to go into a home just before he died actually, when the social worker came to do the assessment he asked Grandad about the house. My Grandad said that the house was my Dad's (he had actually bought the house before he met my Mum in 1982) it is an ex-local authority property, and his name was on the deeds every since 1982. My parents married in 1983, Dad luckily never took his name off the deeds but Dad had to prove everything and it wasn't straight forward with the council even under these circumstances, Dads name had been on the deeds since day one of the purchase over 20 years.
    The council are getting very strict on tennent's in common too, not just when you sign a property over to family.
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  • Bossyboots
    Bossyboots Posts: 6,746
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    You must get a solicitor involved to get the house signed over legally.

    That is simply untrue (unless there is a mortgage and then it will be the lender that requires a solicitor's involvement). You can do the documents yourself if you are even reasonably competent.

    If a deed of trust is required then that is something that should be drawn up professionally, but that document will not prevent the issues that have been raised here coming to the fore.
  • nearlyrich
    nearlyrich Posts: 13,698
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    I would be very careful of signing away rights to assets that you may need to sell in order to buy a more suitable property, what if one of the "benificiaries" doesn't agree with the move, you could be stuck in a house that's too big, too expensive to run, maybe with stairs that you can't manage anymore because someone else wants to keep the house and live in it after you are gone.

    I have worked all my life and if I die having spent my last fiver my children will have to get over it, I would rather choose care based on my needs and preferences if I have to than accept the LA choice if it's not suitable.
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  • Tim_L
    Tim_L Posts: 3,816
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    Another thing to watch with transferring ownership in part is that it can create a very complex capital gains tax situation. Some of the things people do without advice staggers me - I've a good mate whose house is in his, his mother's and his sister's name, as his mother's and sister's. This was a DIY attempt at removing IHT or care home liabilities, but they are now absolutely stuffed as no one of them can sell and move without generating a stonking CGT liability for the other two.

    I agree with many of the people above, really - assets are for the benefit of the owner during their lifetime, and it's questionable that I (as a taxpayer) should be expected to pay for care for people who have assets of their own.
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    Isn't it amazing - all these cautionary tales of what can happen, with real live examples as in Tim_L's good mate, and Bossyboots' former neighbour. I've heard this idea floated so many times - 'if we put the house into the children's names that will protect our assets from care costs/IHT'. It sounds such a simple idea doesn't it? But fraught with perils. I wish more people could read this thread. Just have a look at the AgeConcern and Help the Aged discussion boards and see how often this same topic comes up. The sort of examples quoted here should really be seen much more widely.

    I too am staggered at the things that people do in a DIY way, on the cheap, without proper advice.

    Best wishes

    Margaret
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  • LondonDiva
    LondonDiva Posts: 3,011
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    There's also the assumption the the local authority will force you to move to pay for care. This is not the case, in most cases what they will do is have first dibs on money raised from the sale of the house when you die.
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  • margaretclare
    margaretclare Posts: 10,789 Forumite
    Another thing that occurred to me - suppose that parents put house into children's name, continue to live in it while paying rent which children declare of tax return (anything else is illegal!!) Suppose then that one parent dies and the survivor remarries? You then have not only children and their spouses, but step-children as well! Just another can of worms to consider.

    Don't tell me it's unlikely that older people remarry - I remarried aged 66 (5 years ago, isn't it wonderful?)

    Margaret
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
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