Gifting a Propertry

Mojisola

Mojisola wrote: »

Does the relative have any good reason for thinking they are entitled to an inheritance from your mother?

Why would the relative try to contest the will?

If you know his/her reasons, that can be discussed with both solicitors and information kept in their notes about it.

Mrs_pbradley936

Contested wills are a nuisance. My friend's father died leaving house to his wife (friend's mother). Mother's will leaves equal shares to 3 children BUT then friend's brother dies before the mother. So mother makes a new will leaving everything to her two remaining children.

When the old lady dies the wife of the brother contests the will claiming her "share". It is pointed out that she has no share because mother made a new will after her son died.

It took two years to sort it out because she kept writing to the probate people and they had a duty to investigate!

kinger101

You need to seek legal advice on this. But I suspect if none of the other family members are classed as her dependents, your mother could do as she pleases with her property.

teddysmum

Mojisola wrote: »

If she's able to stay at home, that's fine but who knows what her health will be like in the future? She may have no choice.

Some illnesses (eg dementia with violence) are beyond the coping abilities of even the most willing relative and residential care becomes the only option.

xylophone

It is essential that your mother takes independent legal advice and that her solicitor obtains a statement from her doctor that she is of sound mind and fully capable of understanding the effects of her decisions.

Otherwise, it would be quite possible for another family member to allege "elder abuse through undue influence".

With regard to your moving in to the property, (and presumably making it your PPR), this would mean that your old property becomes a second home and there would be CGT to consider.

See below re Deprivation of Assets.

See http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

Person_one

MrEnigma wrote: »

She will still be living in the property
We are considering whether she will pay rent @ market rate
We know about deprivation of assets, and she refuses to go into care.

Rent at market rate? When she's been living there mortgage free?

MrEnigma

xylophone wrote: »

It is essential that your mother takes independent legal advice and that her solicitor obtains a statement from her doctor that she is of sound mind and fully capable of understanding the effects of her decisions.

Otherwise, it would be quite possible for another family member to allege "elder abuse through undue influence".

With regard to your moving in to the property, (and presumably making it your PPR), this would mean that your old property becomes a second home and there would be CGT to consider.

See below re Deprivation of Assets.

Currently in rented accomodation, thanks

MrEnigma

Person_one wrote: »

Rent at market rate? When she's been living there mortgage free?

Thats what I have been advised, thanks

macca1974

I would have thought that gifting you the property and then getting your mother to pay a market rent on it is a bit of an extreme solution personally. Its also horribly tax in-efficient as you would have to pay tax on the rent which on a £275K property is presumably going to be a decent amount.

I would agree with what others have said in the legal advice would be a pretty good idea in this situation as unless other family members are dependent on your mother then it is unlikely that they would be able to contest the will, but if they did do so it could be a long drawn out pain in the back side.

Another option worth considering (and speaking to a solicitor about) could be that you mother places the property into trust, as its under the NRB, there would be no CGT to pay. The trust would provide your mother with a "life interest" in the property so she would have the right to live there for the rest of her life, she wouldn't need to pay any rent and in the event of her death, the trustees then pass the property onto you/whoever your mother has selected as the beneficiary. The property won't be included in her estate, so probate / wills etc become irrelevant.

Just a thought, but perhaps worth speaking to a STEP qualified solicitor about.

Mojisola

MrEnigma wrote: »

My mother wants to gift me her property, it is worth £275k, so no IHT, or CGT.

MrEnigma wrote: »

Thats what I have been advised, thanks

The only reason someone would pay rent on a property they have given away is to avoid IHT. As this isn't an issue, I can't see any reason why she should pay you rent.

If you went down the 'joint tenants' route, she certainly wouldn't have to pay you rent.