Putting our house in trust Help Please

arthurx1234

Hi,

We are retired we have made our wills and made our Lasting Power of Attorney, now we want to put the house in trust for our children, but have no clue where to start.

Can anyone advise us

Thanks

Arthur

John_

What is it that you hope to gain by doing this? That may well affect the advice which you are given, as very often people don’t achieve what they want but can end up in a bit of a mess.

coyrls

Assuming "we" refers to a married couple and assuming you are attempting to avoid inheritance tax by creating a trust, is your estate (including your house) worth over £1M?  If not there will be no inheritance tax liability anyway.

xylophone

What are you trying to achieve by doing this?

AnotherJoe

Trying to evade care home charges?  This wont accomplish that. You can potentially evade half in a different way. Via your wills. Which you've already made so that's a bit backward. Why didnt you ask the solicitor who did the wills about this?

Sebo027

coyrls said:

Assuming "we" refers to a married couple and assuming you are attempting to avoid inheritance tax by creating a trust, is your estate (including your house) worth over £1M?  If not there will be no inheritance tax liability anyway.

Um.. https://www.gov.uk/inheritance-tax

arthurx1234

Answers to your questions

Home not worth more than 1 million

Yes we are trying to avoid care home charges

We have altered our wills/deeds so we each own half of our house

---------------------------

My question is--- if we do put the house in trust will this hamper the sale of our house if we want to downsize.

Arthur

coyrls

Sebo027 said:

coyrls said:

Assuming "we" refers to a married couple and assuming you are attempting to avoid inheritance tax by creating a trust, is your estate (including your house) worth over £1M?  If not there will be no inheritance tax liability anyway.

Um.. https://www.gov.uk/inheritance-tax

From the link you posted:

If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren your threshold can increase to £500,000.

If you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. This means their threshold can be as much as £1 million.

xylophone

Yes we are trying to avoid care home charges

Wilful deprivation of assets in order to obtain, maintain or increase means tested benefits?

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs40_deprivation_of_assets_in_social_care_fcs.pdf

Deprivation covers a broad range of ways you might transfer a capital asset out of your possession. Annex E of the guidance provides the following examples that may be deemed to be deprivation of capital:

• assets put in to a trust that cannot be revoked

xylophone

We have altered our wills/deeds so we each own half of our house

You have changed from joint tenants to tenants in common.

Whichever way you own the house, if one of you remains in it and one goes into care, the property cannot be taken into account in the means test.

If both, then it can.

If in your will you leave your share to a person other than your spouse ( usually with a lifetime interest in possession to the spouse) and you die, then should the survivor need care, only the survivor's share can be taken into account in the means test.

Do your wills include the arrangement above?

Sailtheworld

arthurx1234 said:

My question is--- if we do put the house in trust will this hamper the sale of our house if we want to downsize.

Arthur

Just a bit - the house won't be yours anymore.

If you want to avoid care home fees or IHT the easiest way to do this is to be poor. So start spending more and giving money away. The younger you are the less likely this will be seen as deprivation of assets and you'll have the last laugh when the council place you in a place that smells of cabbage that's been boiled in p**s for a week.

Full time care can burn up a lot of money but people overestimate their chances of needing it and also their longevity if it is needed.

A more productive (and positive) strategy is to find the balance between building wealth to pay for your future needs and giving away wealth in excess of this.