Mum wants to transfer house deeds to myself after dad has died.. best way to do it for her?

welshlad46

As per headline my dad has recently passed away and my mum wants the house signed to myself (only child) as she is worried that if something happened to her that her and dad would as she says “turn in there graves if the state were to get the house”.

My mum is 64 and in good health. The house is all paid off and she has the deeds. I have been informed about the 7 year rule thing? But il be honest any help or advice anyone could give us with this would be a great help. Obviously she will keep/live in the house for the rest of her life  but she just wants something sorted sooner than later. Is it best to do thr deeds as a gift and change ownership or is it best to have me added to the deeds? 

Any help is really appreciated 

sammyjammy

Please don't do this, if your Mum ever needs care how will that be paid for?  The state don't get the house, the house would be sold so that she could fund and chose her own care or you could on her behalf.  What if your life falls apart through divorce or bankruptcy?  She would lose her home.

The list of reasons not to do it is endless.

Martin_the_Unjust

Wot sammy said plus have a google for deprivation of assets.

theoretica

Also if you own that house and don't own a different main home you would need to pay the higher stamp duty if you ever buy a home yourself.  When you eventually sell mum's house you would need to pay capital gains tax from the day she gives it to you.  AND as she is still living in the property I believe the 7 year thing doesn't apply for inheritance tax - so that would be due as well.  Adds up to the tax getting a lot out of the house!

Pixie5740

welshlad46 said:

As per headline my dad has recently passed away and my mum wants the house signed to myself (only child) as she is worried that if something happened to her that her and dad would as she says “turn in there graves if the state were to get the house”.

My mum is 64 and in good health. The house is all paid off and she has the deeds. I have been informed about the 7 year rule thing? But il be honest any help or advice anyone could give us with this would be a great help. Obviously she will keep/live in the house for the rest of her life  but she just wants something sorted sooner than later. Is it best to do thr deeds as a gift and change ownership or is it best to have me added to the deeds? 

Any help is really appreciated 

Who does your mum think should pay for her care in later life? 

What she is proposing won’t work anyway. As others have already mentioned “Deprivation of Assets” meaning should she require care in later life she will be assessed as still owning the house. 

What have you been informed about with regards to the 7 year rule? That it won’t apply because presumably she will still be living in the property after giving it away? 

Annisele

What you're talking about is called a "gift with reservation" (to give you some more things to google). The point is that your mum isn't giving you a gift entirely free and clear - her idea is that she's giving you her house subject to her right to live there for the rest of her life. That is going to end up taxable one way or another - at least capital gains tax, and possibly inheritance tax too depending on the size of your mum's estate.

As things stand now, your mum might have to sell her house if she needs care and can't live in it anymore. But if she transfers it to you, she might have to sell it if you get divorced, or if you go bankrupt. Or even just if you lose your job - claiming means tested benefits when you have a whole house that you could sell if you wanted doesn't tend to go down so well.

p00hsticks

What she's proposing is rarely, if ever,  a good idea.

For a start, unless she's prepared to pay you the going market rate in rent to continue living there, her signing the house over to you won;t remove it from her estate for inheritance tax purposes, even after seven years - google  'gifts with reservation of benefits'. And unless she has lots of other assets or the house is worth a considerable amount the chances are that - under the current rules - her estate probably wouldn't be liable to IHT anyway.

From your point of view, assuming you're not living with her, it's a bad move. You'll be liable for Capital Gains Tax on any increase in value from the moment it;s gifted to you to until  when you eventually come to sell it, and if you don't already own a property it'll exclude you from any first time buyer sche,mes and incentives and means you'd pay additional Stamp Duty Land Tax when you come to buy.

It'll also become an asset of yours that will be up for grabs if you should ever get into debt or get divorced. Your mum might not like the idea of the 'state getting the house' but would she be happy with a divorcing spouse of yours getting it ?

Presumably she's thinking about trying to avoid care costs in the future ? It's a common fear that is WAY out of proportion with the reality. The majority of people don't need to go into care at all, and for those that do, sadly they are not often the long before they die.  Self funding care means that you get to choose where you go and provides much better options than if you are relying on local authority funding - local authorities generally look VERY hard at people's financial position before agreeing to fund them and are likely to consider any such move as being deprivation of assets.  

In my opinion, the best thing you could do is assure her that you would prefer to see her looked after as best as possible in her old age, and she should therefore hang onto her assets to ensure this can happen, as this takes priority over any inheritance that you might get.

One thing that you could do, as you say she has the deeds to the house, is to check to see if it has been registered with the land registry, and if not apply to get it done , as this would speed up the process if and when the property needs to be sold at any time in the future.

https://www.gov.uk/search-property-information-land-registry

justwhat

How long has since your  dad passed away, Was there a will ? Did you get probate?

Look up rules regarding deed of variation if your dad passed away recently. It may help.

(jus remember if the house is owned by the son/daughter they control the sale or care home funds. If the parent owns the house then the council will force sale, you have no choice.)

Loza2016

I recently lost my dad to dementia. He was in a nursing home for 18 months self funding. I’m so glad he had the option to pay for the home we wanted. 

Some of the homes we visited were horrible. 

My mum like yours is left with a house and good amount of savings. There’s no way on this earth I would allow her to sign her house/ savings over to me. 

Grumpy_chap

welshlad46 said:

As per headline my dad has recently passed away and my mum wants the house signed to myself (only child) as she is worried that if something happened to her that her and dad would as she says “turn in there graves if the state were to get the house”.

My mum is 64 and in good health. The house is all paid off and she has the deeds. I have been informed about the 7 year rule thing? But il be honest any help or advice anyone could give us with this would be a great help. Obviously she will keep/live in the house for the rest of her life  but she just wants something sorted sooner than later. Is it best to do thr deeds as a gift and change ownership or is it best to have me added to the deeds? 

Any help is really appreciated 

If your Mum gifts you the house but continues to live there for live, that is a "gift with reservation" and still counted as part of her estate for IHT purposes.

How would your mother meet care costs if they are ever required?  If this would require the house to be sold but she cannot as it was given away, then this would likely be "deprivation of assets".

Also, impacts to yourself in the mean time if you ever fall on hard times / relationship breakdown / move house.  What if one of these events requires the house to be sold?

csgohan4

Often misconception to gift your house to your offspring to avoid state care

It won't help and will exposure mother to more risk. 

Usually people split the ownership to tenants in common 50/50 write their half of the house to their offspring(s) in their will, to reduce but not eliminate how much of the house is used for state care   

But considering state funded Nursing homes are quite grotty and you get what you pay for. Do you really want to use this?