Buying a house for my grown up child

idrankthecoolaid

I will shortly be in receipt of an inheritance following the sale of property. This was due to be included with monies from the sale of mine and my partners current home, and we were going to move. We currently run a business together with a few years left on the lease, and there is no get out clause.

All would have been fine, except there is now a very strong possibility that I am about to become involuntarily single.

This leaves me with a predicament, I will be in receipt of the money (not a great deal but enough to buy a small house or apartment)

We (soon to be possible ex and myself) also work together as I have said, and we are looking to get someone to take over our current business. We cannot get out of our current lease so it would have be assigned to a new business owner, so my current partner, possibly soon to be ex, and myself will have responsibility for it until the lease ends. We are a partnership and not a limited company. This would have been less of a worry if we we remaining together but since we may not....

In order to protect my inheritance from being seized to pay business related debts which might arise should the person who takes over our business defaults on payments in any way, I was wondering if I could buy a property for my 20 year old using a trust of some kind? I realise I would still be partially liable along with my soon to be ex, but was just hoping to make my inheritance safe.

I was therefore thinking that if I give my inheritance to my 20 year old (our 20 year old), it would be safe, but how is the best way to do this... so I thought property....and a trust seems to be the thing, if I have understood things, it means that I can escape elevated stamp duty if I do it this way (since I already jointly own our current home with my partner)

How does this work / how do you go about it?
Would the money be safe since my 20 year old would own and live in the property?
What if I lived in the property also (a possibility but not a certainty)

steampowered

You need to decide whether you want to retain the money or whether you want to hand it to the 20 year old. You can't have it both ways.

If you hand the money over to your 20 year old - whether through a trust or otherwise - the money belongs to them, and you are not entitled to have it back.

Giving the money to your 20 year old might be the best thing to do, but there is no guarantee of getting that money back.

xylophone

I will shortly be in receipt of an inheritance following the sale of property.

If you wish your son to benefit, had you considered the possibility of a Deed of Variation of the Will?

https://www.gov.uk/alter-a-will-after-a-death

AdrianC

Will the executor of the estate consider varying the will, so the legacy goes straight to your child?

If not, and the money is coming to you, then you cannot simply give it away to avoid using it to settle your debts.

idrankthecoolaid

I know that I will most probably not get it back - ultimately I would have left it to our child in my will anyway. I don't want it to get swallowed up if the business I share with my soon to be ex goes bust.

idrankthecoolaid

AdrianC wrote: »

Will the executor of the estate consider varying the will, so the legacy goes straight to your child?

If not, and the money is coming to you, then you cannot simply give it away to avoid using it to settle your debts.

I dont have any debts at present.

My question was about how buying a property using a trust works. I am presuming that property then belongs to whoever the trust is for, and therefore cannot be claimed back at some point in the future *if* I should end up incurring debt from a business that is not currently in any trouble, but who knows what the future holds.



The Will has been very problematical due to another family member (I have posted about it at length elsewhere on here). It would be less stressful if it went through as it was to be honest.

xylophone

It would be less stressful if it went through as it was to be honest.

DoV need not be stressful- remember only affected beneficiaries have to agree.

https://www.gov.uk/alter-a-will-after-a-death

You can change a person’s will after their death, as long as any beneficiaries left worse off by the changes agree.

davidmcn

It's not clear why you want the money to be held in trust rather than just go to your child? It complicates things somewhat, especially if e.g. there's a desire for the property to be mortgaged (or the money to go towards a property which requires the balance to be financed by a mortgage).

idrankthecoolaid

davidmcn wrote: »

It's not clear why you want the money to be held in trust rather than just go to your child? It complicates things somewhat, especially if e.g. there's a desire for the property to be mortgaged (or the money to go towards a property which requires the balance to be financed by a mortgage).

No mortgage required.


I just wanted some advice as to how about going about buying a property using a trust fund.

idrankthecoolaid

Can anybody advise?

AdrianC

Yes, your accountant can.