Transferring house into child's name

Derbyshire_Phoenix

Hi all,

I understand I'm going to have to take legal advice on this at some stage, but I would appreciate your collective thoughts initially, if only to point me in the right direction.

My parents have recently suggested that it might be a good idea to transfer ownership of their house to me, in order to avoid the possibility of having to sell it to pay for care home fees. I know this is a horrible thing to contemplate but the fact of the matter is my parents are both in their early eighties (I am an only child btw) and whilst they are currently both in relatively good health thank goodness, this may not always be the case.

I wonder if anyone had been in a similar situation and could offer any advice. We were also wondering if it might be prudent (or possible even) to just transfer say, 50% of the property to me, rather than deeds of the entire house.

Any advice would be most welcome, and I can provide further specific details if necessary; please just let me know. I should also add that the mortgage is paid off and my parents own the house outright.

I think that's everything. Even if you can only point me in the direction of some helpful websites I would really appreciate it; all the ones I came across in my initial research were US specific...


Kind regards
Sarah

JoKay_2

I'm sure someone more knowledgeable will come along soon, but as far as I am aware, there are some problems with your plan, such as potential inheritance tax issues, as well as some Local Authorities still insisting on people paying for their own care when such a transfer has taken place, as it is seen as a deliberate move to avoid paying.

reb223

I know it's really morbid and horrible to think about, but when a property is gifted to a child, the parent must live for at least 7 more years, otherwise the house would still be subject to interitance tax unless the total estate (including house, money, shares, etc) fell within the threshold, which is now £300,000.

maypole

Also, if they continue to benefit from the asset that they have in effect given away, they should pay you rent. You can't apparantly give the property over and still live there free. See a solicitor.

Wig

Also, a health authority cannot make you sell your home if your need for care is the result of an illness (or something like that) - there was a Panorama program about it a while ago. And if one of your parents needs care, if they wish to still live together, the health authority has to provide accomodation suitable for the two of them to remain living together - this has something to ddo with the human rights act.

david29dpo

from what i have been told by my solicitor, if you do this, and i have been thinking of doing the same, if your parents need to go into a home after say 1,2,3 years, if will be seen as trying to get out out of paying care fees. after say 7,8,9 years, it get more difficult to prove. also bare in mind when you sell the house, you will have CGT to pay, as it is not your main house.

EdInvestor

If parents are trying to avoid losing the house to pay for care, then they should firstly make sure they own the house as "tenants in common", 50% each. They can then each leave their half of the house in trust for you on death.

The council is not allowed to take the house to pay for one person's care if the spouse is still living in it.They could take a charge against one half of the home, so as to get the money after the spouse dies, but often they don't bother, as they can't sell half a house - the other half will be owned first by the spouse at home, and then by you.

Different arrangements apply if you are trying to avoid IHT (estate must be over 300k).

Why not get the parents to look into the cost of the care and see if they can afford it themselves anyway?An "immediate needs annuity" is not that expensive as a top up to pensions Attendance Allowance etc and it guarantees the payment (and is also tax free).

The council will only be looking for the cheapest home available, which may be a long way away from the spouse at home: is that really what they would want?

http://www.sharingpensions.co.uk/annuity_immediate_needs.htm

JoeK_3

Derbyshire_Phoenix wrote: »

Hi all,

I understand I'm going to have to take legal advice on this at some stage, but I would appreciate your collective thoughts initially, if only to point me in the right direction.

My parents have recently suggested that it might be a good idea to transfer ownership of their house to me, in order to avoid the possibility of having to sell it to pay for care home fees. I know this is a horrible thing to contemplate but the fact of the matter is my parents are both in their early eighties (I am an only child btw) and whilst they are currently both in relatively good health thank goodness, this may not always be the case.

I wonder if anyone had been in a similar situation and could offer any advice. We were also wondering if it might be prudent (or possible even) to just transfer say, 50% of the property to me, rather than deeds of the entire house.

Any advice would be most welcome, and I can provide further specific details if necessary; please just let me know. I should also add that the mortgage is paid off and my parents own the house outright.

I think that's everything. Even if you can only point me in the direction of some helpful websites I would really appreciate it; all the ones I came across in my initial research were US specific...


Kind regards
Sarah

You need a combination of legal advice and financial advice to help you to resolve these issues.

You should be aware that there are general practice people in the solicitor and IFA world that only have a brief understanding of the subjects under discussion.

You require a good Indipendent Financial Adviser (IFA) and a good solicitor to write a will, considering a will trust, power of attorney etc.

JoeK

saintalan

Speaking from the other side of the fence i.e. someone who has had / having raging battles with the LA/NHS, this can be a minefield!

2 major points, if the person is in in care and not fully funded by the NHS then they will be means tested if you ask for LA funding. This is an increasingly challenged area from both sides. Most if not all LA's will seek monies if they have been deliberately given away etc to avoid having the means. There is no limitation on this and many LAs will now seek back further than 7 years.

Don't believe that they can not sell or will not try to sell 'half' a house. I started with this premis a year ago and, if it were not for subsequently getting NHS funding for the person in care, would be facing an Ombudsman/court review. I have seen the papers from Legal Counsel that my LA have. The likes of Age Concern are well aware of the changed attitudes by LA's on this front.

Beware before you change between Tenants-in-common and joint ownership. Anyone considering this should take legal advice and do a lot of reserach to their particular circumstances before doing so. There can be swings and roundabouts.

Give the above I am sure there are some folk here who can help from a money saving angle.

Good luck Sarah.

Alan

PS the real key is if anyone needs care its better to get and probably a right (but not easy to get) NHS fully funded care. This site may help.

JoeK_3

saintalan wrote: »

Give the above I am sure there are some folk here who can help from a money saving angle.
.

Thanks for sharing this with us. As indicated these issues are serious and need to be dealt with by competent professionals and NOT in a forum as this.

Opinions are one thing but proper advice that with stand up to future challenges is another.

Please take professional advice.

JoeK

Wig

EdInvestor wrote: »

If parents are trying to avoid losing the house to pay for care, then they should firstly make sure they own the house as "tenants in common", 50% each. They can then each leave their half of the house in trust for you on death.

JoeK wrote:

You need a combination of legal advice and financial advice to help you to resolve these issues.

Just looking at these two quotes, reminded me of my parents. They had an indy finance advisor, who told them to go "tennants in common" route. He wanted something like £3,000 to do it for them. They asked their solicitor, who did it for them for a few hundred quid!