Signing house over to children before care

Fester_2 · 6 December 2006 at 5:56PM

Bossyboots wrote:

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?

Many thanks again BB.
You and others have raised some interesting and sensible points.
I am still thinking about things.

djohn2002uk · 6 December 2006 at 6:02PM

On the contrary Margaret. The house no longer has anything to do with any future husband or stepchildren, or even the survivor. It now belongs where it should, with the children of the original parents. At least the deceased went to his/her grave knowing that if the surviving spouse remarries then other dependents (who were nothing to do with him) don't get their hands on the house.
I know it's only a "What if", but.......

margaretclare · 6 December 2006 at 6:16PM

djohn2002uk wrote:

On the contrary Margaret. The house no longer has anything to do with any future husband or stepchildren, or even the survivor. It now belongs where it should, with the children of the original parents. At least the deceased went to his/her grave knowing that if the surviving spouse remarries then other dependents (who were nothing to do with him) don't get their hands on the house.
I know it's only a "What if", but.......

Not too sure about that.

When I remarried in 2002 I changed the title from my name alone to joint tenants with my DH. I was advised - by a housing advisor when I worked at CAB - that if I died my DH could be homeless and I didn't want to risk that happening. My concerns, on going into a new relationship, was to be fair to my present partner. In our wills, whichever of us dies first, this property belongs 100% to the survivor, and that's the way we want it (and yes, we've considered the other option, joint tenancy, but we don't want it). Whatever is left after the second death is to be split between our 5 grandchildren, 3 of mine and 2 of his. We feel that that's the fairest way all round. It's true that DH's 2 granddaughters are 'nothing to do with' my first husband, as you put it. But life moves on, and we have to live in the present, and having married thier grandad, I regard them as mine just as much as he does.

I don't understand what you say about 'the house has nothing to do with the survivor'. Where is the survivor supposed to live?

Margaret

alwaysskint96 · 6 December 2006 at 6:40PM

A cautionary tale here. My ex's cousin bought his grandparents house while the were both still alive. About 8 years later Grandad dies and the year after that the cousin's marriage failed so he sold the house that his grandmother was living in ( she was nearly 90 at this time|) to buy himself somewhere else to live and she ended up living in a 1 bed council flat

Torry_Quine · 6 December 2006 at 6:59PM

Bossyboots wrote:

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.

Sorry but this is true, as I know from personal experience! A relative had signed her home over to us many years before and when she was assesed for council funding she was asked if she had owned the property, which solicitor had handled the signing over of the house and why she had signed it over.:

djohn2002uk · 6 December 2006 at 9:55PM

margaretclare wrote:

Not too sure about that.

When I remarried in 2002 I changed the title from my name alone to joint tenants with my DH. I was advised - by a housing advisor when I worked at CAB - that if I died my DH could be homeless and I didn't want to risk that happening. My concerns, on going into a new relationship, was to be fair to my present partner. In our wills, whichever of us dies first, this property belongs 100% to the survivor, and that's the way we want it (and yes, we've considered the other option, joint tenancy, but we don't want it). Whatever is left after the second death is to be split between our 5 grandchildren, 3 of mine and 2 of his. We feel that that's the fairest way all round. It's true that DH's 2 granddaughters are 'nothing to do with' my first husband, as you put it. But life moves on, and we have to live in the present, and having married thier grandad, I regard them as mine just as much as he does.

I don't understand what you say about 'the house has nothing to do with the survivor'. Where is the survivor supposed to live?

Margaret

"suppose that parents put house into children's name,"...your words.
So house now belongs to the children. I see no way that the new stepfather or any of his children come into the equation. None of them can have any claim to a house that is now being rented. So I see no can of worms, everything seems cut and dried to me. Of course the whole of this was hyperthetical and I would hope that the children would look after their mother untill her dying day, but you often hear that children dislike step parents and so might not look favourably on the stepfather if he survived the mother. He would have no claim apart from the law governing sitting tenants.
Now that might be a can of worms.

MissScarlett_3 · 7 December 2006 at 7:41PM

My parents were anxious for one of us (4 children) to buy their house under the RTB as they'd lived there 35 years and had done so much to it.They regretted not buying it many years before but circumstances didn't allow and in hindsight it is easy to say 'we should have bought years before'. It took us 5 years to decide to buy and in the end I bought it, my siblings weren't interested. 6 years on I am still paying the mortgage (10 years taken out)and my parents live (and have since purchase) rent free. I bought for £23000 and the house is currently worth £140000. My mom in particular is always saying she wants to transfer the house into my name. I wont. The property is willed to me and that's good enough.If I'm honest I don't understand the implications of transfer and am too busy to find out! IF one dies and the other needs to go into a home then I have no qualms if the house is sold to pay for that.My mother however does, she doesn't want me to lose out but that's parents for you. Yes it would be nice to inherit £140000 BUT it has been more satisfying to have let my parents live rent free so far, I get great satisfaction that I have been able to repay them a little. It's a risk and one I am prepared to take, hand on heart I will not lose sleep if the LA take the property. I for one can't understand how children can 'throw' their parents out of their own home. Saying that I work on the RTB section of a LA and am amazed at some of the scams people pull.

woodside61 · 7 December 2006 at 10:52PM

I am planning the following

1. We are buying a house with no mortgage to live in
2 Putting the house in 5 names ie kids as well who are 12 to 8 yrs old
3. In 6 years time getting the oldest one to sell his portion of the house back to us and then loaning us the money we pay him for his portion which he can then claim back against the estate when we die and so on for each of the other 2 children when they hit 16 or the month beforehand to avoid issues of control etc

This way we can avoid a hefty portion of IHT in the future as well as safeguarding our house against spouses who marry into the family and then separate.

has anyone else thought of this or is it nonsense?

chris:beer:

glitterygert · 8 December 2006 at 10:00AM

MissScarlett,thats fantastic, I think what you have done is wonderful.

Ted_Hutchinson · 8 December 2006 at 10:34AM

woodside61 wrote:

I am planning the following

1. We are buying a house with no mortgage to live in
2 Putting the house in 5 names ie kids as well who are 12 to 8 yrs old
3. In 6 years time getting the oldest one to sell his portion of the house back to us and then loaning us the money we pay him for his portion which he can then claim back against the estate when we die and so on for each of the other 2 children when they hit 16 or the month beforehand to avoid issues of control etc

This way we can avoid a hefty portion of IHT in the future as well as safeguarding our house against spouses who marry into the family and then separate.

has anyone else thought of this or is it nonsense?

chris:beer:

So what happens when/if one of those children needs to claim means tested benefits in the future. They have an investment in property and would be expected to part with that capital asset before claiming off the state.

Signing house over to children before care

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