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  • FIRST POST
    TheWaltons
    How can I sign a house over to my son?
    • #1
    • 12th Apr 07, 5:35 PM
    How can I sign a house over to my son? 12th Apr 07 at 5:35 PM
    How can an OAP sign a house over to her son, without it costing hundreds?

    She lives in her own property and has paid the mortgage off. She has also paid the mortgage off on her OTHER property, which her son lives in.

    So, she has 2 properties. One she lives in. One her son lives in. Both in her name.

    His name is on the Deeds of the house he lives in, along with her and his dad (parents).

    She wants to give the house to her son, now before anything happens to her.

    What can be done?
Page 1
  • consultant31
    • #2
    • 12th Apr 07, 8:43 PM
    • #2
    • 12th Apr 07, 8:43 PM
    I think you need to see a conveyancer (which is usually cheaper than seeing a solicitor). When my parents made their house over to me earlier this year, the cost was about £250 + £80 land registry fee, which I paid as I'm to be the one to benefit.
    By all means let's be open-minded, but not so open-minded that our brains drop out.

  • Willman Rodders
    • #3
    • 6th May 07, 11:45 PM
    Why transfer the ownership of the house?
    • #3
    • 6th May 07, 11:45 PM
    I know your original question was about how to transfer the title of a house to a son. Can I ask why the mother wants to transfer it?

    As a willwriter and former IFA I often come across requests of this nature. There are usually one of two reasons:

    1. Reduce the size of the parent's estate for IHT purposes; or
    2. Avoid the house being forcibly sold to fund long-term-care.

    In the case of 1 the inheritance tax 'gifts with reservation' rules apply, (unless the parent is paying a commencial rent on the property) which would negate the effect of the transfer for IHT purposes.

    In the case of 2 the 'Care in the Community Act' allows Social Services to question why the transfer was made; the only logical answer as to why a parent would give up her residence is to avoid long term care costs. It is illegal to dispose of assets to avoid these costs. Social Services would then consider enforcing the son to fund the parent's long term care - again negating the effect of the transfer.

    One final point. If the son does own the house what happens if he gets into financial difficulty and is declared bankrupt? What happens if the son (and assuming he is married) gets divorced? what happens if the son dies?

    What a costly mistake it could be to transfer ownership.
  • greyteam1959
    • #4
    • 7th May 07, 9:27 AM
    • #4
    • 7th May 07, 9:27 AM
    Completely and utterly agree with Willman Rodders.
    Its just not as simple and clear cut as people think this transfering property to sons and daughters......as he says lots of problems can arise.
  • margaretclare
    • #5
    • 7th May 07, 1:51 PM
    • #5
    • 7th May 07, 1:51 PM
    I'm not so sure that all this applies - transfer of assets to avoid care costs etc. As I understand it, the OP owns 2 houses and only wants to transfer one of them to her son, which he's living in at the moment. (Is he paying rent to his mum for the house that she owns but that he inhabits?)

    I think if that was me, I'd want to give the son his own house as a gift. It's not like transferring the title to her own house to avoid care costs, which is the usual scenario we hear about (with monotonous regularity).

    The Mum in question is described as an OAP, which is a horrible demeaning term. She's a retired lady, one assumes - widowed or single, perhaps? There are better and more accurate terms than that horrible outdated 'OAP'.

    Margaret
    r ic wisdom funde, r wear ic eald.
    Before I found wisdom, I became old.
  • Errata
    • #6
    • 7th May 07, 1:53 PM
    • #6
    • 7th May 07, 1:53 PM
    A slight clarification. It is not 'illegal' to dispose of assets such as property in order to avoid possible future care costs. The council will simply refuse to make any contribution to the costs if they believe someone has deprived themselves of assets deliberately in order to avoid contributing to some or all of their care costs, although the time gap between selling and needing care is taken into account.
    In reality very few people need residential or nursing care and despite far more people living longer these days, government is keen for people to receive care in their own homes and the cost of this can be wholly or partly covered by attendance allowance.
  • EdInvestor
    • #7
    • 7th May 07, 8:57 PM
    • #7
    • 7th May 07, 8:57 PM
    So, she has 2 properties. One she lives in. One her son lives in. Both in her name.
    Originally posted by TheWaltons

    She also needs to check the capital gains tax position which would arise if she makes a disposal of the property, as it's not her main residence.
  • Lady_K
    • #8
    • 7th May 07, 10:08 PM
    • #8
    • 7th May 07, 10:08 PM
    [QUOTE/]

    One final point. If the son does own the house what happens if he gets into financial difficulty and is declared bankrupt? What happens if the son (and assuming he is married) gets divorced? what happens if the son dies?

    What a costly mistake it could be to transfer ownership.[/QUOTE]

    He would have to cover himself in case any of that happened including having a will himself to leave it to his own children if he has any would be the best thing I'd think

    I've been thinking about doing this for some time now somehow myself
    Thanx

    Lady_K
  • chateau
    • #9
    • 8th May 07, 7:08 PM
    • #9
    • 8th May 07, 7:08 PM
    I was told that there is a timespan of seven years, beyond which sons or daughters would be safe from having to pay care costs once they have acquired the property. Has anybody heard this?
  • margaretclare
    I was told that there is a timespan of seven years, beyond which sons or daughters would be safe from having to pay care costs once they have acquired the property. Has anybody heard this?
    I've heard just the opposite - that there is NO time-span.

    I think this case is a little bit different in that son actually lives in the house she's proposing to give him, and I can't see why anyone would object to that. The lady still has the other house, the one in which she lives, no one is proposing that she gives that one away as well.

    On the wider question, 'safe from having to pay care costs'. Just who is supposed to pay these care costs, if the person herself doesn't?

    BTW we haven't been told how old the lady is. Are 'care costs' a likely scenario?

    Margaret
    r ic wisdom funde, r wear ic eald.
    Before I found wisdom, I became old.
  • Willman Rodders
    Clarification of a number of points ...
    Firstly thanks to 'errata' for correcting my earlier statement.

    With regards to Chateau and the 7-year rule - in my experience this is a common area of confusion. However ....

    The 7-year rule applies to inheritance tax planning (make a gift, and survive 7 years - the gift falls outside of the estate for IHT calculation.); and

    The funding of long term care costs is governed by Care in the Community 1990 and I understand there is no time limit.

    As a will writer some years ago I was concerned about the validity of using trusts in a will to protect property from funding long term care. The head of legal services for a council advised me that they will look at the background to each and every case. He stated there was no time limit; importantly if you are showing signs of dementia and then you make a will, or transfer assets away from your estate this is a 'clear sign of trying to avoid paying your fees'.

    Margartclare has mentioned in a couple of posts that long term care may not be a concern, and that the lady wants to give her second house to her son. I read, and have reread the original post and I missed Margaretclare's angle.
    However, I remain confused. The original post talks about two properties, both in mother's name and then states...

    His name is on the Deeds of the house he lives in, along with her and his dad (parents).

    so I am still not sure which property mother is looking to transfer to her son.
  • Errata
    Local authorites may have flexibility on what kind of gap is acceptable between disposal of assets and requiring the LA to contribute to care costs.
    For instance 20 years may be ok, 20 months not. Of course the difficulty is that nobody can know whether they will need care eventually and when it will happen.
  • stu54
    A slight clarification. It is not 'illegal' to dispose of assets such as property in order to avoid possible future care costs. The council will simply refuse to make any contribution to the costs if they believe someone has deprived themselves of assets deliberately in order to avoid contributing to some or all of their care costs, although the time gap between selling and needing care is taken into account.
    In reality very few people need residential or nursing care and despite far more people living longer these days, government is keen for people to receive care in their own homes and the cost of this can be wholly or partly covered by attendance allowance.
    Originally posted by Errata
    Just joined & not sure what to do

    Question What if parents remortgage thier property & lost this money plus their savings whilst gambling or playing on line bingo. Would this be a way, Im sure this wouldnt be trackable. Then care would be payed for. Any views please.
  • dzug1
    Just joined & not sure what to do

    Question What if parents remortgage thier property & lost this money plus their savings whilst gambling or playing on line bingo. Would this be a way, Im sure this wouldnt be trackable. Then care would be payed for. Any views please.
    Originally posted by stu54
    The remortgage IS trackable.

    And isn't spending on gambling deliberate deprivation of assets?
  • Mojisola
    Just joined & not sure what to do

    Question What if parents remortgage thier property & lost this money plus their savings whilst gambling or playing on line bingo. Would this be a way, Im sure this wouldnt be trackable. Then care would be payed for. Any views please.
    Originally posted by stu54
    "Would this be a way" to make the taxpayer fund their care while their children try to hide the fact that they're living beyond their income, spending money from a huge stash of cash hidden somewhere? I can see a lot of potential problems.

    Visit a few homes which are financed by the council and then a few where people are paying for their own care. See which you would rather spend your last years living in.
  • oldandhappy
    Our neighbour last year lost her Husband suddenly and as she suffers from dementia she was unable to look after herself so her only Son decided a nursing home was the best option for all. The property had to be sold to pay for the ongoing healthcare. He said to us it would not be what either of his parents would have wanted to have happened. No choice of passing on there lifetime wealth to children in this situation which I find a real shame actually. Dianne
  • Mojisola
    Our neighbour last year lost her Husband suddenly and as she suffers from dementia she was unable to look after herself so her only Son decided a nursing home was the best option for all. The property had to be sold to pay for the ongoing healthcare. He said to us it would not be what either of his parents would have wanted to have happened. No choice of passing on there lifetime wealth to children in this situation which I find a real shame actually. Dianne
    Originally posted by oldandhappy
    Why should the taxpayer pay for her care just so her son could inherit a lot of money?
  • getmore4less
    How can an OAP sign a house over to her son, without it costing hundreds?

    She lives in her own property and has paid the mortgage off. She has also paid the mortgage off on her OTHER property, which her son lives in.

    So, she has 2 properties. One she lives in. One her son lives in. Both in her name.

    His name is on the Deeds of the house he lives in, along with her and his dad (parents).

    She wants to give the house to her son, now before anything happens to her.

    What can be done?
    Originally posted by TheWaltons
    Fairly simple title transfer and a check on the tax situation.


    On the assumtion that they own a 1/3 each then that would be the values used for the calculation of any CGT for the Mum and Dad.

    There are various reliefs that may apply for example if the parents lived there befere the current place.

    Since this is the sons home(how long) and allready owns part of it the deprivation of assets is unlikely to apply as long as they are all in good health.

    As others have said the situation needs carefull consideration for the possible followon senarios.
  • jimjog
    My mum and dad bought their council house over 3 years ago and would like to transfer ownership over to me, they will continue to live in the house until they both pass on. However, what we are worried about is my mum and dad losing their benefits they are both on disability living allowance and they also get council tax benefit. If the house is signed over to me will that mean that I will have to then pay fulll council tax and that they will lose their DLA? They are both in their 70's and are just wanting to do right by me but I don't want them to lose out in any way and I just want them to enjoy the erst of their days in the home that they have loved for over 30 years. Can anyone advise me on this and any other in's and out's of this that I probably don't know about? Many thanks
  • monkeyspanner
    Difficult to advise on this without you giving a little more as to why they want to do this. Is it IHT related (if your parents continue to live in the house without paying rent it will be considered a gift with reservation) or care home fees related (you need to consider deliberate deprivation of assets). What about if you go bankrupt or accidentally die what happens to the house then?

    As regards the DLA I think it would be better to start a new thread on the benefits forum
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