My parents house and care home

SuzieSue

csgohan4 wrote: »

What if the house price was say 120k with 2 children, so split 4 ways ergo 25% each, which would still be above the threshold for paying for your own care home. Also this house price is way below the IHT bracket.


How would that work?? would they force a home sale or put a charge on the house?

If the house was well below the IHT bracket and the parents had no other assets to take them above the nil rate band, then there would be no need to own the house as tenants in common and then leave half the house to the children when the first spouse died.

So if the LA questioned why they had decided to do that, the parents would have to have a good reason as it would be a foolish thing to do if any of the children got divorced after the first death or if any of the children needed to claim benefits as the house might have to be sold.

xylophone

There can still be reasons for a married couple to want to hold a house as tenants-in-common.

For example, each might want the ultimate beneficiary of his/her estate or part of it, to be a person other than the spouse.

csgohan4

xylophone wrote: »

There can still be reasons for a married couple to want to hold a house as tenants-in-common.

For example, each might want the ultimate beneficiary of his/her estate or part of it, to be a person other than the spouse.

But as others have pointed out, now that the IHT bracket has increased considerably, that argument no longer can stand against deprivation of assets

Pixie5740

Some married couples will always have owned a property as tenants-in-common. I imagine those who have children from previous relationships or no children at all might do things this way. For the purposes of depravation of capital that's probably ok. It's when a married couple who have always owned a property as joint tenants then convert to tenants-in-common in their old age that might raise suspicions.

Mojisola

SuzieSue wrote: »

If the house was well below the IHT bracket and the parents had no other assets to take them above the nil rate band, then there would be no need to own the house as tenants in common and then leave half the house to the children when the first spouse died.

So if the LA questioned why they had decided to do that, the parents would have to have a good reason as it would be a foolish thing to do if any of the children got divorced after the first death or if any of the children needed to claim benefits as the house might have to be sold.

Some elderly people change their will and leave their estate to charities or carers or their pet. If each partner wanted to make sure that their share of the property was inherited by, say, their children it would make sense to become tenants in common.

As long as the will was properly written, there wouldn't be any issues about the house being sold while the surviving spouse still wanted to live there - the share of the property left in the first will should be in trust and not actually inherited until after the second death.

csgohan4

Pixie5740 wrote: »

Some married couples will always have owned a property as tenants-in-common. I imagine those who have children from previous relationships or no children at all might do things this way. For the purposes of depravation of capital that's probably ok. It's when a married couple who have always owned a property as joint tenants then convert to tenants-in-common in their old age that might raise suspicions.

But I guess depends on the time frame. If done a few weeks before needing care home, then yes. If it was done 10+ years before, then yes.


However they may question why, especially if it below the IHT bracket as a simple will, will do the same job and not attract IHT.