Am i putting family and mum at risk?

Garethc

Hi, my mum recently spoke about transferring the ownership of her home to us, her 4 children. She is 75 now and wants things to be sorted in case anything happens to her.
I have a voluntary debt agreement where i pay around a total of £200 per month to 4 different companies who i owe money to. My job is secure, as secure as it can be i am worried in case i fall ill or lost my job that i could not afford the £200 per month and these companies would then take me to court and i would have to declare my 25% stake in my mums property as an asset. Is there any risk of my mum losing her home and therefore being made homeless by the court?
My debt is £17,000.
I am obviously worried that my mum and siblings will be effected by my past financial stupidity. Thank you in advance for any advice.

sourcrates

Hi,

Welcome to the forum.

I do hope you are using a free DMP provider and not one that charges a monthly fee.

There is no risk to your mums house, worst case senario if you were taken to court would be a restriction on the property, and as only a 25% stakeholder, I doubt they would even get that.

There is no risk of a full charging order, as you have to be a sole owner, so do not worry.

Garethc

Yes i am, many thanks. I did think that but obviously was worried. Thanks for reply.

elsien

If there is the possibility of mum needing care in the future you all need to be aware that giving her home away could constitute deprivation of assets and potentially be looking at the money being reclaimed from the children in the future.


https://www.ageuk.org.uk/information-advice/care/social-care-and-support-where-to-start/paying-for-care-support/deprivation-of-assets/

badmemory

You should be aware though that if your mother is attempting to avoid any care costs in the future this may not work. Deprivation of assets. Because LAs are increasingly short of funds they are becoming ever tighter on this. So unless she has lots of savings to cover any care she may need they may assess her as still having this asset. Also if you or your siblings buy another house they will be charged as if it is their second home because they already own one.

So to turn this on its head - she could be putting you (and your siblings) at risk of financial issues in the future.

Garethc

My mums savings would cover her care. Thank you for your replies.

Sea_Shell

Garethc wrote: »

My mums savings would cover her care. Thank you for your replies.

That must be heafty savings pot, as care costs can be approx £1000 per WEEK!!

Cakeguts

Sea_Shell wrote: »

That must be heafty savings pot, as care costs can be approx £1000 per WEEK!!

For 20 years. People can live in care homes for years and years and years.

I don't think many people realise just how expensive this can be.

AnotherJoe

Sea_Shell wrote: »

That must be hefty savings pot, as care costs can be approx £1000 per WEEK!!

My friends mother is paying £1400/week :eek:

I agree with the others, what mum is attempting to do will likely backfire, it could lead to all sorts of expensive financial consequences, such as the forced sale of the house (as OP asked about), CGT as and when mum dies rather than zero if house was left in will, additional SDLT 3% for some of the siblings if they dont currently own a house but buy one and additional Inheritance Tax (IHT) since she wont be able to claim an exemption for the house.

Or take a few worst case possibilities, one of the siblings gets divorced, partner claims their share of the 25% or less drastic, a sibling gets into financial difficulties, debtors go after their share of the house and force a sale. Or extreme case, there's a family falling out, one sibling wants their 25% forces a sale.

And getting back to what Sea Shell said, say the mum went into care aged 80 and died aged 95, not at all beyond the bounds of possibility, thats 15 years at £1k a week = £780k. Does mum really have those sort of savings? If she does, i dont see the point of passing on the house she'd be better off passing on some of those savings to reduce IHT and use the house as a backup for care costs as she wont be needing it if she goes into care.

Garethc

All good points thank you. Mum has not got savings above £150,000. She is being advised by a solicitor and im not sure the advice is sound, they have advised her to split the house 5 ways, including her with 4 siblings. Obviously she has worked and saved all her life and wants to leave the house to her 4 children which i understand. The solicitor has said there are no guarentees in splitting the house that it wont be sold and used for care so im wondering why do it then. If anyone has any experience of this or ideas they'd be most welcome. I hadnt realised care could be that expensive tbh. All good poibts and thanks for comments.

sourcrates

Garethc wrote: »

All good points thank you. Mum has not got savings above £150,000. She is being advised by a solicitor and im not sure the advice is sound, they have advised her to split the house 5 ways, including her with 4 siblings. Obviously she has worked and saved all her life and wants to leave the house to her 4 children which i understand. The solicitor has said there are no guarentees in splitting the house that it wont be sold and used for care so im wondering why do it then. If anyone has any experience of this or ideas they'd be most welcome. I hadnt realised care could be that expensive tbh. All good poibts and thanks for comments.

Splitting it 4 ways is always going to lead to a sale at some point, in order to realise each individuals capital.

Another way to do it would be for her to alter her will appointing an executor, who on her death would sell the house and split the proceeds 4 ways in accordance with her wishes.

I cannot see the need to change ownership in that way to be honest.