Transfer of mum's property to me, her only child

Samos

Hello

My mother (72 y/o) lives on her own in a suburban London property worth around £325k (no mortgage). I'm her only child, mid 30s.

We have talked about the possibility that one day she may need to go into a home, and how expensive that could be. Obviously she would like me to benefit from the home she worked so hard for years (as a teacher in London) to get.

She would like to pass ownership to me but still live there.

Could this be a good way of avoiding potential care home costs for her in the future.

Will my not living with her affect matters? Would it be better if I lived there too once I am the owner?

Currently I am renting in London which is expensive and I cannot afford to buy, especially as house prices are on the up.

Being a home owner could boost my mortgage chances however, and when the inevitable happens I will have a valuable property which I can sell.

I've been reading about 'deliberate deprivation' however am confused as to the best thing to do in this situation. We do not want to rip anyone off however we also want to be able to use the house for some personal future benefit.

Any advice will be much appreciated. Thanks in advance.

BigAunty

See the Age UK website to understand about the care home process, means tested benefits and services and deprivation of assets. They have an information factsheet that outlines the risks of what you propose and how a council may react.

Post your proposal (or cross link) on the housing forum as you probably haven't considered aspects like inheritance tax, CGT and similar, plus your formal responsibilities as a landlord.

LittleMissGiggles123

From recollection of previous threads, if your mother does go in to a care home & you apply for help towards funding from the local authority, they can look as far back as they think is necessary to check for deprivation of assets.

Who do you think will end up paying those care home costs if your mother has no means to pay for them?

Browntoa

she downsizes and releases capital looks more normal rather than "gifting" the property

Mojisola

Samos wrote: »

My mother (72 y/o) lives on her own in a suburban London property worth around £325k (no mortgage). I'm her only child, mid 30s.

We have talked about the possibility that one day she may need to go into a home, and how expensive that could be.

Obviously she would like me to benefit from the home she worked so hard for years (as a teacher in London) to get.

Which would you prefer - for you to benefit from all your mother's hard work while your mother is in a cheap home which accepts local authority rates or for your mother to benefit from all her hard work by spending her last years in comfort in the residential home of her choice?

Your mother could live for another 20+ years. If you take over the ownership of her home, what happens if you die or go bankrupt or get divorced or need to claim means tested benefits?

KxMx

You and your mother want the home passed to you and your mother to get all her care costs free.
Currently your Mum has an asset to find any future care costs.
Getting rid of that asset to get all care free is blatantly ripping people off.

xylophone

See http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm


http://www.hmrc.gov.uk/inheritancetax/pass-money-property/pass-home-to-children.htm

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS10_Paying_for_permanent_residential_care_fcs.pdf?dtrk=true

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS38_Treatment_of_property_in_the_means-test_for_permanent_care_home_provision_fcs.pdf?dtrk=true

Lioness_Twinkletoes

Mojisola makes such a good point. If it were my Mum I would rather she had the very best residential care she can afford - and £300k buys a lot of excellent care. Council run care homes are basic at best.

Why deprive your Mum of comfort and security in her final years? Strikes me it is less about her needs and all about what you want.

pmlindyloo

Why does this question always turn into a debate about securing the best care home for your future type thing? This is often total rubbish. There are good care homes and bad care homes. The money you pay does not necessarily equate with the kind of care you get.

People spend their money how they like and someone who spends their money on living the good life while they are younger are not penalised for being funded by the state if they have to go into a care home, yet people who save and buy their own house and then ask how they can protect it get a lot of abuse on this forum.

Having had my rant I just want to say that there are perfectly legal means of protecting your home. The important thing is to do this when you are youngish and as part of your financial planning for your later years. It should go along side making a will.

For the OP it is probably too late and his parents have not planned their finances carefully.

Having said that it does not always mean you have to sell your house. There are other possibilities - renting it out for example or having community care.

Yes, none of us can predict what will happen and most of it will be through no fault of our own. Therefore let's give useful advice instead of this constant - 'why should you?' attitude.

Rant over.

KxMx

pmlindyloo wrote: »

Why does this question always turn into a debate about securing the best care home for your future type thing? This is often total rubbish. There are good care homes and bad care homes. The money you pay does not necessarily equate with the kind of care you get.

Rant over.

I agree, but having independent funds gives people choice and power over their own fate, which in my view is priceless.

pmlindyloo

KxMx wrote: »

I agree, but having independent funds gives people choice and power over their own fate, which in my view is priceless.

If you know your 'rights' there is a considerable amount of choice as regards care homes even if they are being funded by the local authority.

I have been through this with my own mother.

The problem is that people can be easily intimidated by social services /hospitals wanting the bed back. It is usually a time when family is distressed over the circumstances affecting a family member and just do not realise or do not have the energy or 'know how' to 'fight' the authorities.

Personally I think all care homes should be funded like the NHS with people paying from any income they have for food/accommodation but the caring should be free.