eventual care home

coolsteel

What are the pitfalls of signing over my house to my offspring,

Obviously if I ever have to go into care way in the future I don't want the government make my kin sell my house to fund my care.
There must be a criteria to do this so i stay within the law.
Also what about my savings? can i do the same?

thanks for your thoughts :cool:

tescobabe69

Put your tin hat on mate.

moonrakerz

The overwhelming majority of people DO NOT end up in a care home..........

dunstonh

There must be a criteria to do this so i stay within the law.

There are various ways you can reduce the chances. However, often they come at a cost and need to be done well in advance and may not necessarily be the best financial thing to do for the statistically most likely outcome. As monrakerz says above, the number that actually go into care is very small. Its something like under 1 in 10.

nearlyrich

And before anyone else says it why should the tax payer fund your care because you have given away your money?

Errata

If you are currently fit and healthy with no chronic problems, then there's nothing to stop you, and you can argue that there was no indication or evidence that you would need residential care. Many people don't.

tyllwyd

Signing over your house to your children is a risky business. For one thing, you are trusting them that they won't turn you out onto the street (and even if you trust them 100%, if they get into financial trouble you don't want your house to be seen as one of their assets).

You might also be storing up trouble with regards to inheritance tax or capital gains tax
http://www.hmrc.gov.uk/inheritancetax/pass-money-property/pass-home-to-children.htm

jamesd

coolsteel wrote: »

What are the pitfalls of signing over my house to my offspring.

Offspring gets married then hit by a bus. Offspring's spouse seeks court order to sell the house so spouse can get the value of the portion now owned. Or doesn't but gets remarried then gets hit by a bus. The new spouse moves to sell, as is their right.

Offspring doesn't get hit by a bus but starts a business that fails and is made bankrupt. Their portion of the house is part of their assets and the official receiver moves to sell it to repay their creditors.

Offspring gets sick with something that can be cured but only with expensive medical care. Faces a choice of forcing sale of the house to pay for their medical care or dying. Or their child does, not them, and they sell to pay for the child's medical care.

You end up needing to find a new place to live, without any part of the value of the house to help you do it, just whatever income and other savings you have.

Do the same with the savings and now all you have left is your income to find a new place to live.

Doing it within the law is easy if there's no sign of you needing the care. The problem is the risk you're taking. It's OK if you don't mind renting and can rent a place you'd like to live in on your remaining income.

If you do this with an eye towards inheritance tax you'd also have to pay market rent to your offspring or the gift will be ignored and it will be treated as still your property, because it was a "gift with reservation".

ragga_2

Hi, sorry to jump on your wagon here but i'm new to this and don't know how to start a thread. As an investment, I bought my mum and dads council house back in 1997, with a joint 3 way mortgage. which is now payed up as i've now bought my own house and had to put that debt onto my new mortgage as i'm not allowed two mortgages. Now, it's getting to the stage where it looks like dad may have to go into a home. I know the government can't simply take the house off us and kick my mum out, my question is, Will the fees from the care home eventually come from the house as there are three names on the deeds, and is there any way I can stop from losing my investment?

dunstonh

my question is, Will the fees from the care home eventually come from the house as there are three names on the deeds

Typically yes.

and is there any way I can stop from losing my investment?

What trust arrangements were put in place by your solicitor to cover this sort of event?

ragga_2

What trust arrangements were put in place by your solicitor to cover this sort of event?[/QUOTE]
I honestly don't know, the solicitor we used for the conveyancing has since gone out of business and the only thing I can find in my paperwork is the mention of a trust declaration in the conveyance papers, but i'm not sure if thats active, cheers for any help!
Is it too late to act now?