Signing house over to children before care

Hi folks
can anyone help with the rules of signing the house over to the children in case care is needed and having to sell the house to pay for it........don't know where to post this.......where do I stand........?
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  • Treatment of the former home as capital for people in care homes - FS38
    Paying for care in a care home if you have a partner - FS39
    Transfer of assets and paying for care in a care home - FS40

    The above links are from Age Concern
    Help the Aged have a similarly helpful information page here

    The matter is far more complicated than you may think because if you give away your home, but continue to live in it you are benefitting from that gift. The income tax people will want to know if you are paying rent and where the rent's going. There have been too many cases where people have done this only to find their child or the child's partner exerts pressure to evict the tenant so they can dispose of the property. I know you think it could never happen to you but you can't tell what's going to happen in five years time.

    Do be aware that MOST people don't go into care homes. When they do most people are not there for years on end.
    There are other threads here where these matters have been previously discussed. Try searching this forum for "Care home costs"
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  • This article explains it pretty well
    http://www.direct.gov.uk/HomeAndCommunity/SocialHousing/CareHomes/CareHomesArticles/fs/en?CONTENT_ID=10031523&chk=W2hEIM

    In particular
    It is against the law to transfer ownership of an asset to another person specifically to avoid paying your care home fees. The law states that if you’ve transferred an asset to another person within the six months before you get a place in a care home, your local council can make you pay your care home fees.
  • Thanks for this I will start doing my homework...will be gratefull for any other comments or experiences .....
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    As far as care costs are concerned the key thing is to split assets between spouses: switch ownership of home to "tenants in common" (and then make wills leaving everything to each other) and divide up savings as well.

    This means that only the assets owned by the individual in care can be used to pay for care, otherwise the person still at home can be left with no money. The house cannot be taken while the spouse ( or a child over 60) lives in it.

    The rules are very complex, but as Ted says, not many people are actually affected.
    Trying to keep it simple...;)
  • As Edinvestor says it is very important to arrange your finances in such a way as to minimise inheritance tax and you really need a professional adviser to ensure you've taken the right steps.
    I do think that you still need control over your finances so that should the worst happen and you have to go into a home, either residentail or nursing, that you, or your guardian, have the power to make decisions in your best interests.
    The local authority are strapped for cash and will offer the cheapest accomodation available. There may be nothing wrong with their choice but it may not be in the right place for your visitors, it may simply not be right for you although it meets all the current legal requirements. If you do not have the cash available to decide for yourself or your aged parent that they need to move to a place where they can have visitors more frequently or a more amenable enviroment what are you going to do.

    By the time most elderly folk are in this position their children, even their grandchildren will have homes and this addittional inherited wealth from the old person home will be spent simply on holidays or moving upmarket. The extra wealth that has been generated in the old persons home should in my view be spent first to ensure that persons needs are met FIRST, this means retaining sufficient funds to enable them or their guardian (should Alzheimer's strike) to have the flexibility of independent choice should it be needed. I really don't see the current priority for children to get their hands on the capital to squander it on new cars and flash holidays should take priority over the needs of the elderly person and their right to spend their remaining years with as much dignity and care as possible.

    I think it is misplaced generousity for elderly people to think their first priority should be to pass on wealth to their children or grandchildren rather than spend it on themselves ensuring they have a reasonable standard of care in their last few months.

    I would be very disappointed if my children tried to persuade me to pass on the value of my house to them rather than waste it on my getting proper care in my last few months.
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  • notakid
    notakid Posts: 10,362
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    Another thing to keep in mind as it happened to friends of my parents is when you sign over your house to your children you also are signing it over to their spouses. If the marriage then fails the spouse can also claim on the signed over house. This happened about 10 years ago and maybe people are more aware of the pitfalls now but it is something to keep in mind. (My parents friends where forced to move as they had no legal redress) It scared my parents so much that they abandoned the whole idea. Which is fine by me as I agree with Ted that the house should fund them when they need it not me.
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  • margaretclare
    margaretclare Posts: 10,789 Forumite
    I do think that you still need control over your finances so that should the worst happen and you have to go into a home, either residential or nursing, that you, or your guardian, have the power to make decisions in your best interests.

    The local authority are strapped for cash and will offer the cheapest accomodation available. There may be nothing wrong with their choice but it may not be in the right place for your visitors, it may simply not be right for you although it meets all the current legal requirements. If you do not have the cash available to decide for yourself or your aged parent that they need to move to a place where they can have visitors more frequently or a more amenable enviroment what are you going to do.

    By the time most elderly folk are in this position their children, even their grandchildren will have homes and this addittional inherited wealth from the old person home will be spent simply on holidays or moving upmarket. The extra wealth that has been generated in the old persons home should in my view be spent first to ensure that persons needs are met FIRST, this means retaining sufficient funds to enable them or their guardian (should Alzheimer's strike) to have the flexibility of independent choice should it be needed. I really don't see the current priority for children to get their hands on the capital to squander it on new cars and flash holidays should take priority over the needs of the elderly person and their right to spend their remaining years with as much dignity and care as possible.

    I think it is misplaced generousity for elderly people to think their first priority should be to pass on wealth to their children or grandchildren rather than spend it on themselves ensuring they have a reasonable standard of care in their last few months.

    Ted, I couldn't agree with you more. I have said the same thing on numerous occasions and I've always been shouted down by people whose main priority, as they express it, is to 'save my inheritance from the council/the Chancellor'. They express it in a quasi-altruistic mode i.e. 'my parents/grandparents have worked hard, saved, spent a lifetime building up assets, why should those assets be 'wasted' on paying for their care?'

    I have said many many times that a person's assets should be used primarily for that person, that an inheritance does not exist until someone is dead, that no one has a divine right to an inheritance from an earlier generation, and that most of us didn't have one and managed OK. I still do not see how money spent to ensure better quality care, choice and comfort can be said to be 'wasted' and I have always asked the question 'and who do you suppose is going to pay for this care?' The answer is always 'the taxpayer' and that's you and me. The fact that grandparents/parents paid taxes all their lives counts for nothing, it's the taxes that are currently being paid that matter. Whether that should or should not be the case can be argued about till Kingdom come.

    Margaret
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  • Ted you are such a sensible person.
  • Fester_2
    Fester_2 Posts: 22 Forumite
    Is it possible just to add the childrens names (or anyone else you want) to the house deeds?
    I mean can you just visit a solicitor and add on any names you like to the deeds?
    Just wondered.
  • Bossyboots
    Bossyboots Posts: 6,746
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    Fester wrote:
    Is it possible just to add the childrens names (or anyone else you want) to the house deeds?
    I mean can you just visit a solicitor and add on any names you like to the deeds?
    Just wondered.

    You can do it without even using a solicitor if there is no mortgage. The form (TR1) is on the Land Registry website.
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