signing house over to offspring

simmey

I know someone who would like to sign over her house to her offspring now while she is still living in it, is it possible to do this, she is in her 70's. She would live there rent free and pay the bills herself.

Her thoughts are she would like to sort her finances now while she feels she is able to and to avoid having to pay for long time care if she needs it in the future.

margaretclare

I too am in my 70s and I applaud her desire to 'sort her finances now while still feeling able to'. However, this is not the way to do it, although it's a very common idea but has numerous drawbacks.

As she has specifically mentioned 'avoiding paying for long time care if she needs it in the future' she should look up 'deliberate deprivation of assets'. This gets discussed almost every day on Martin's site and others.

The other point is, she may not need long-term care - I assume by this she means going into residential care? Wouldn't she even be willing to pay for care coming into her own home, because that is a more likely scenario.

tbs624

Agree with Margaretclare - someone giving capital /property away in order to become entitled to local authority care home funding will find that this would be regarded as deliberate asset deprivation.

The local authority can seek to reassess your friend's assets: if s/he needed care within 6 months of the t/f the local auth assessment would treat the assets as still belonging to your friend. If it's a gap of more than 6 months then the local auth may decide that seeking to avoid care home fees was a "significant motive", and there is no time limit on this one.

What's to stop your friend's offspring deciding that they would like to charge Mum/Dad rent once the property is in their name? What if the offspring divorce and the property "asset" becomes part of the matrimonial wranglings?

Your friend should seek advice via AgeConcern and Help the Aged websites initially plus a good local lawyer with experience of care home planning and inheritance tax issues.

Robert_Sterling_3

The OP wants other people's children to pay for her care and for her children to get her money. We might have similar hopes ourselves. However I do not want my children to pay for her care and I do not suppose she wants her children to pay for my care.

margaretclare

Robert_Sterling wrote: »

The OP wants other people's children to pay for her care and for her children to get her money. We might have similar hopes ourselves. However I do not want my children to pay for her care and I do not suppose she wants her children to pay for my care.

It's the OP's friend actually, Robert.

Am I unique for my age-group - I don't want anyone to have to pay for my 'care', if it happens that I eventually need it. I prefer to pay for it myself.

clutton_2

there was a thorougly heart breaking thread on here last year from natasha - whose parents did this and their son sold the house from under them and they were left in utterly dire circumstances.......

this is not a good idea

margaretclare

clutton wrote: »

there was a thoroughly heart breaking thread on here last year from natasha - whose parents did this and their son sold the house from under them and they were left in utterly dire circumstances.......

this is not a good idea

I agree.

This is one of the obvious pitfalls. But then you'll get them coming back with 'oh we're a close family, we wouldn't do that...'

The fact is, you have given them the power to evict you should they choose to do so, and who knows, their financial circumstances may change, divorce etc. Having worked hard for many years to have a secure roof above my head, personally the last thing I would want to do is to hand it over to someone else, even a family member.

In addition, living there rent-free is not an option. The OP's friend should pay rent and the son/daughter should enter it as income on his/her tax return, otherwise there are all kinds of penalties for that.

tbs624

margaretclare wrote: »

I....
In addition, living there rent-free is not an option. The OP's friend should pay rent and the son/daughter should enter it as income on his/her tax return, otherwise there are all kinds of penalties for that.

The son or daughter can choose to allow someone to live in a property and pay no rent, without having a tax problem related to declaration of "unearned income" from property letting. The problem is for the "tenant" - a tenancy agreement cannot be an AST if there is no or little rent paid, so we're back to the lack of security of tenure issue.

Robert_Sterling_3

clutton wrote: »

there was a thorougly heart breaking thread on here last year from natasha - whose parents did this and their son sold the house from under them and they were left in utterly dire circumstances.......

this is not a good idea

It was not a good idea in this case.

gismo1554

I know when we took over my Grandmothers mortgage/house we were told that if she became in need of a care home within 7 years of taking over the mortgage we would loose the money from the house as it would have to be sold and all proceeds go back to the state for my Grandmother's care. It's best to get a solicitors advise on this before going down this road.