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Best thing to do to benefit mum?
nicoledwards
Posts: 12 Forumite
in Cutting tax
Dad died intestate and mum is disabled requiring 24 hour care. Her Care bill is part funded at the moment by the NHS but once the estate from he husband comes through she will have to fund it until her savings drop to £21k. Her care costs will be about 3,000gbp amonth.
She already becomes owner of her house as they were joint tenants. House value is about 280,000 gbp
She gets the first part of the estate (125,000) as per the rules for a person dying without a will and the rest is then divided in 2, half she has a life interest in (50,000), half goes to her 2 sons (25,000 each).
Solicitor originally agreed with mums wishes to do a Deed of Variation so that she would waver her life interest and give to this to her two sons. Would this be chaseable by social services ?
However solicitor has now suggested the following: that she should not waver the life interest. That she and the sons should set up a Discretionary trust with the house, and that her and the 2 sons would be beneficiaries.
The solicitor is suggesting that the house be put in a trust administered by her brother and the solicitor himself.
The solicitor has said this will lessen the inhertance tax bill in the event of her eventual death.
She has end stage MS, but life expexctancy could be anything from 1 to 10 years, impossible to accurately diagnose.
Mum and sons are concerned that they want the best to be done to pay less inheritance tax, to make sure the money is used in the best way, and to ensure that the NHS can't come after the house so she that has to move out and sell up. The solicitor has pointed out that the NHS could argue that this DoV regarding putting the house in trust could still be chased by the NHS.
They are also wondering if the solicitor being a trustee is normal or whether they may be trying to pull a fast one, he states that the Trustees would retain an IOU over the property, so that ownership of the property could rest with mum and that the loan would be repaid to the trust in the future, securing her husbands tax free allowance. What does that mean ?
Long post with many questions but help would be welcome on any points! Isn't this thing such a minefield!
She already becomes owner of her house as they were joint tenants. House value is about 280,000 gbp
She gets the first part of the estate (125,000) as per the rules for a person dying without a will and the rest is then divided in 2, half she has a life interest in (50,000), half goes to her 2 sons (25,000 each).
Solicitor originally agreed with mums wishes to do a Deed of Variation so that she would waver her life interest and give to this to her two sons. Would this be chaseable by social services ?
However solicitor has now suggested the following: that she should not waver the life interest. That she and the sons should set up a Discretionary trust with the house, and that her and the 2 sons would be beneficiaries.
The solicitor is suggesting that the house be put in a trust administered by her brother and the solicitor himself.
The solicitor has said this will lessen the inhertance tax bill in the event of her eventual death.
She has end stage MS, but life expexctancy could be anything from 1 to 10 years, impossible to accurately diagnose.
Mum and sons are concerned that they want the best to be done to pay less inheritance tax, to make sure the money is used in the best way, and to ensure that the NHS can't come after the house so she that has to move out and sell up. The solicitor has pointed out that the NHS could argue that this DoV regarding putting the house in trust could still be chased by the NHS.
They are also wondering if the solicitor being a trustee is normal or whether they may be trying to pull a fast one, he states that the Trustees would retain an IOU over the property, so that ownership of the property could rest with mum and that the loan would be repaid to the trust in the future, securing her husbands tax free allowance. What does that mean ?
Long post with many questions but help would be welcome on any points! Isn't this thing such a minefield!
Proud Mummy to DS born 13/05/2006 & expecting DD 06/07/2010
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