Main site > MoneySavingExpert.com Forums > Who & Where are You? > Over 50s Money Saving > Signing house over to children before care (Page 1)

IMPORTANT! This is MoneySavingExpert's open forum - anyone can post

Please exercise caution & report any spam, illegal, offensive, racist, libellous post to forumteam@moneysavingexpert.com

  • Be nice to all MoneySavers
  • All the best tips go in the MoneySavingExpert weekly email

    Plus all the new guides, deals & loopholes

  • No spam/referral links
or Login with Facebook
Signing house over to children before care
Closed Thread
Views: 111,281
Thread Tools Search this Thread Display Modes
# 1
Equanimity1
Old 27-11-2006, 10:26 PM
MoneySaving Convert
 
Join Date: Sep 2006
Posts: 31
Default 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........?
Equanimity1 is offline
Report Post
The Following User Says Thank You to Equanimity1 For This Useful Post: Show me >>
# 2
Ted_Hutchinson
Old 27-11-2006, 10:32 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Apr 2004
Posts: 6,871
Default

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"

Last edited by Ted_Hutchinson; 27-11-2006 at 10:40 PM.
Ted_Hutchinson is offline
Report Post
The Following 4 Users Say Thank You to Ted_Hutchinson For This Useful Post: Show me >>
# 3
A Nice Englishman
Old 27-11-2006, 10:35 PM
Serious MoneySaving Fan
 
Join Date: Aug 2006
Posts: 1,883
Default

This article explains it pretty well
http://www.direct.gov.uk/HomeAndComm...523&chk=W2hEIM

In particular

Quote:
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.
You can find any answers you want on the Internet.It's working out which ones are right that is so difficult.
A Nice Englishman is offline
Report Post
The Following User Says Thank You to A Nice Englishman For This Useful Post: Show me >>
# 4
Equanimity1
Old 28-11-2006, 9:51 AM
MoneySaving Convert
 
Join Date: Sep 2006
Posts: 31
Default

Thanks for this I will start doing my homework...will be gratefull for any other comments or experiences .....
Equanimity1 is offline
Report Post
# 5
EdInvestor
Old 28-11-2006, 10:11 AM
Deliciously Dedicated Doubly Diehard MoneySaving Devotee
 
Join Date: Sep 2004
Posts: 15,682
Default

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.
EdInvestor is offline
Report Post
The Following User Says Thank You to EdInvestor For This Useful Post: Show me >>
# 6
Ted_Hutchinson
Old 28-11-2006, 11:20 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Apr 2004
Posts: 6,871
Default

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.
Ted_Hutchinson is offline
Report Post
The Following 14 Users Say Thank You to Ted_Hutchinson For This Useful Post: Show me >>
# 7
notakid
Old 01-12-2006, 10:38 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Oct 2005
Location: Bedford Falls
Posts: 9,216
Default

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.
But if ever I stray from the path I follow
Take me down to the English Channel
Throw me in where the water is shallow And then drag me on back to shore!
'Cos love is free and life is cheap As long as I've got me a place to sleep
Clothes on my back and some food to eat I can't ask for anything more
notakid is offline
Report Post
The Following User Says Thank You to notakid For This Useful Post: Show me >>
# 8
margaretclare
Old 03-12-2006, 8:05 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Aug 2004
Location: Essex, England
Posts: 9,330
Default

Quote:
Originally Posted by Ted_Hutchinson
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
r ic wisdom funde, r wear ic eald.
Before I found wisdom, I became old.
margaretclare is offline
Report Post
The Following 11 Users Say Thank You to margaretclare For This Useful Post: Show me >>
# 9
Mrs pbradley936
Old 03-12-2006, 8:37 PM
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: Aug 2006
Posts: 11,315
Default

Ted you are such a sensible person.
Mrs pbradley936 is offline
Report Post
# 10
Fester
Old 05-12-2006, 6:11 PM
MoneySaving Convert
 
Join Date: Nov 2006
Posts: 20
Default

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.
Fester is offline
Report Post
# 11
Bossyboots
Old 05-12-2006, 6:24 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Sep 2004
Posts: 6,549
Default

Quote:
Originally Posted by Fester
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.
Bossyboots is offline
Report Post
The Following User Says Thank You to Bossyboots For This Useful Post: Show me >>
# 12
Fester
Old 05-12-2006, 7:20 PM
MoneySaving Convert
 
Join Date: Nov 2006
Posts: 20
Default

Quote:
Originally Posted by Bossyboots
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?
Fester is offline
Report Post
# 13
Bossyboots
Old 05-12-2006, 7:52 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Sep 2004
Posts: 6,549
Default

Quote:
Originally Posted by Fester
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?
Bossyboots is offline
Report Post
The Following User Says Thank You to Bossyboots For This Useful Post: Show me >>
# 14
Torry Quine
Old 05-12-2006, 8:43 PM
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: Oct 2006
Posts: 13,451
Unhappy

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.:
Torry Quine is offline
Report Post
# 15
HOWMUCH
Old 06-12-2006, 7:39 AM
MoneySaving Stalwart
 
Join Date: Nov 2006
Location: Yorkshire
Posts: 409
Default

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.
HOWMUCH is offline
Report Post
# 16
Bossyboots
Old 06-12-2006, 7:59 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Sep 2004
Posts: 6,549
Default

Quote:
Originally Posted by Torry Quine
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.
Bossyboots is offline
Report Post
# 17
nearlyrich
Old 06-12-2006, 8:15 AM
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: May 2004
Location: North West
Posts: 12,491
Default

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.
NEW to the Forum? I'm the Board Guide on
Debt-Free Wannabe

I can move and change posts but I don't have time to read everything. If you spot a reportable post please use the button below.

Any views are mine and not the official line of MoneySavingExpert.com.
Free impartial debt advice from: National Debtline or Stepchange
nearlyrich is offline
Report Post
The Following 4 Users Say Thank You to nearlyrich For This Useful Post: Show me >>
# 18
Tim_L
Old 06-12-2006, 9:18 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Mar 2003
Posts: 3,399
Default

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.
Tim_L is offline
Report Post
The Following User Says Thank You to Tim_L For This Useful Post: Show me >>
# 19
margaretclare
Old 06-12-2006, 10:10 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Aug 2004
Location: Essex, England
Posts: 9,330
Default

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
r ic wisdom funde, r wear ic eald.
Before I found wisdom, I became old.
margaretclare is offline
Report Post
The Following 2 Users Say Thank You to margaretclare For This Useful Post: Show me >>
# 20
LondonDiva
Old 06-12-2006, 12:54 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Nov 2004
Location: London
Posts: 2,945
Default

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.
"This is a forum - not a support group. We do not "owe" anyone unconditional acceptance of their opinions."
LondonDiva is offline
Report Post
Closed Thread

Bookmarks
 
 




Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

 Forum Jump  

Contact Us - MoneySavingExpert.com - Archive - Privacy Statement - Top

Powered by vBulletin® Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.

All times are GMT +1. The time now is 6:58 AM.

 Forum Jump  

Free MoneySaving Email

Top deals: Week of 20 August 2014

Get all this & more in MoneySavingExpert's weekly email full of guides, vouchers and Deals

GET THIS FREE WEEKLY EMAIL Full of deals, guides & it's spam free

Latest News & Blogs

Martin's Twitter Feed

profile

Cheap Travel Money

Find the best online rate for holiday cash with MSE's TravelMoneyMax.

Find the best online rate for your holiday cash with MoneySavingExpert's TravelMoneyMax.

TuneChecker Top Albums

  • VARIOUS ARTISTSNOW THAT'S WHAT I CALL MUSIC! 88
  • ED SHEERANX (DELUXE EDITION)
  • COLLABROSTARS

MSE's Twitter Feed

profile
Always remember anyone can post on the MSE forums, so it can be very different from our opinion.
We use Skimlinks and other affiliated links in some of our boards, for some of our users.