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Wills & Trusts
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Casper55
Posts: 50 Forumite
My wife & I are both in our mid fifties and suffer from cronic illnesses. We own 2 houses the one we live in morgaged & another one which our daughter lives in (no morgage). We are now thinking of updating our wills and would like to put the property our daughter lives into a trust so that she would not loose her home if either my wife of myself go into care. Although the one we live is the more valuble of the two even with the morgage. It is our intention using some of the equity on the property at a later date to boost our pension. Does these seem a straight forward process and what sort of costs would be incurred making new wills with this included. Best REgards Casper
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Hi Casper, this is a tricky situation.
You have to be aware of Inheritance Tax as well as thinking about care home fees. If the net value of both houses and your other property is below £650,000 then you and your wife do not currently have to worry about Inheritance Tax as the double ‘nil rate band’ available to married couples covers this amount. If not, then any gifts must be made 7 years before death to avoid an Inheritance Tax charge.
Looking at care home fees, why set up a Trust? They are expensive to set up and costly to administer. Would it just be easier to make an outright gift to your daughter (of the house or half of the house she lives in?) but keep enough property for your pension top up? Sooner is better than later as ‘care home fees’ will look at recent gifts (5 years before) and may ignore older ones.
Your Wills do not need to mention these arrangements but just ensure they look after each other and on second death your daughter. There are some good online Will websites (e.g. The Will Site), but I would only use one where the Wills are checked by a solicitor, not just a Will writer.0 -
finance_guy wrote: »Hi Casper, this is a tricky situation.
You have to be aware of Inheritance Tax as well as thinking about care home fees. If the net value of both houses and your other property is below £650,000 then you and your wife do not currently have to worry about Inheritance Tax as the double ‘nil rate band’ available to married couples covers this amount. If not, then any gifts must be made 7 years before death to avoid an Inheritance Tax charge.
Looking at care home fees, why set up a Trust? They are expensive to set up and costly to administer. Would it just be easier to make an outright gift to your daughter (of the house or half of the house she lives in?) but keep enough property for your pension top up? Sooner is better than later as ‘care home fees’ will look at recent gifts (5 years before) and may ignore older ones.
Your Wills do not need to mention these arrangements but just ensure they look after each other and on second death your daughter. There are some good online Will websites (e.g. The Will Site), but I would only use one where the Wills are checked by a solicitor, not just a Will writer.0 -
We used
http://beneficentlaw.co.uk
type in benefient law to a search engine if this link does not work.
They seem to be a charity that writes wills and charge a very reasonable /cheap fee for complicated wills. You fill in a form and they send you a preview. I phoned them about sections that involves trusts and they explained it all and were very friendly. Unlike the so called free will writers, they do not pressurise you with eg making them the executors (at great profit to them) Check out the web site and see if they are suitable for your needs. They certainly met ours with complicated sums being left in trust for the partner, being passed on to our children on the second death.
They can also advise on making your properties owned as tenants in common- not joint tenants- but that is quite easy to do with the registry office. Look at their web site. it does not cost anything to change this type of ownership. If you do this, you own half the house each, and can leave your half to your daughter with the surviving partner having the right to live in it, until they die. Beneficient law write in clauses that say the surving partner can move house if they wish. This means if the surviving partner needs to go into a care home, then the social services should not be able to include the value of the house as the surving partner owns only half the house which cannot be sold if the other owner does not want to sell. Its all very complicated as some councils may contest some of this. However it certainly stops them taking the full value of the house. Look at the web site if you think they could help. Good luck - Joanna0 -
Joanna
Sorry it has take so long to get back and thank you. I have emailed them explaining our situation and hopefully they will be able to help us out Best Regards Casper0
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