Putting a house in trust

MEM62

Sedge11 said:

Is it possible to explain something about leaving your home to your children by setting up a trust?

We had our Will people call this week and said that we could

I think you are being hoodwinked.  Unless your property is extremely valuable you do not need to set up a trust - which is both restrictive and expensive.  Selling products that you do not need is how these guys make their money.  

ArbitraryRandom

Sedge11 said:

Are there forms that I can obtain to do this? - is there any guidance you can point me towards please?

Just in case it's not clear - you don't need to fill in a form to benefit from the inheritance tax allowance. All UK tax payers already have it. 

You and your wife EACH have an allowance of £325,000 (and you each own 50% of the property so that's a total pot of £650k). 

If you leave the house you live in to your children, then you each have an ADDITIONAL allowance of £175,000 (so a total of £1m). 

And if one of you dies before the other without using their allowance then it passes on to the surviving spouse (so you can inherit your wife's share of the house then still pass it on tax free). 

There's no need for a trust for that to happen and if someone is saying you DO need to have a trust then I suggest you get advice from someone else (a solicitor) because either your estate is unusual OR they're trying to sell you something you don't need. 

If this is the company that wrote your wills, I'd be tempted to also contact an independent solicitor for a will review (it's a good idea to do this every so often anyway to make sure it's still representing your estate and wishes) - If you're paying this 'will company' for any other services you could also check with the solicitor if they're strictly necessary in your circumstances... 


If you want some guidance/independent verification of what we're saying, here's the government guidance: https://www.gov.uk/inheritance-tax

Here's age concern (as a reputable UK charity): https://www.ageuk.org.uk/information-advice/money-legal/income-tax/inheritance-tax/ 

And last but not least, here's MSE/Martin Lewis: https://www.moneysavingexpert.com/family/inheritance-tax-planning-iht/

sheramber

IHT has nothing to do with paying if you need to go into care.

IHT is a Government tax, fees for care homes is dealt with by the local council.  There is no s 7 year time limit for deprivation of assets for care fees.

housebuyer143

What a lot of people do is leave their share of the property in trust for their beneficiaries after they have died. That's because they are tenants in common and do not want to leave their share to their spouse. This protects half the house from being sold for care. 
I believe you simply write a will stating who your share of the house will be left to on your death, no actual trust is set up until after your death.

As others have said, leaving the entire thing in trust while you are both alive and living there will not avoid IHT.