Right of residence or Property Protection Trust?

Ladylady1971

My partner and I are buying a house together 50/50 as tenants in common - we’re not married and don’t intend to do so. We’re buying cash. 

We want to set up the following situation - if one dies, the other has up to 5 years to sell up and move out so that the deceased person’s share can go to designated family. 

Mine will go to my niece & nephew, my partner’s will go to his daughter and 4 grandchildren. 

We’re both happy with this and think it’s fair in case the recipients ended up waiting 50 years to get their inheritance. 

To achieve this we were told by a wills person at the solicitor’s where we’re doing our house conveyancing we should each do a will with a property protection trust set up, which would cost £1500 plus VAT each. 

I just thought I’d ring around to compare prices (does this seem a fair cost?) and was told by another solicitor we should do a Right to Residence instead…

So now I’m confused. Do we need to do a will either way - then decide on a Right to Reside or Property Protection Trust? How does it work? And which is right? 

Cost wise any ballpark figures?

Any advice gratefully received! I’ve booked a telephone consultation with Coop Legal but it’s not until the 24th July and they’re the ones who confused me with the Right to Reside thing. 

I wondered if anyone here has been in a similar situation? 

Brie

Yes you need wills.  But check if there's a cheap will session coming up near you soonish.  I think it may be generally Oct/Nov and the cost for something relatively simple is normally under £100 each on the basis that you give something to a charity in your will.  (maybe the fee goes to the charity as well?)

I say you should do wills as there's more than just the house that needs to be agreed about and having something official may just stop greedy relatives getting pushy just when whomever the survivor is doesn't need the hassle.  

Keep_pedalling

That is expensive for a couple of wills with a trust clause in them. 

You say you have no intention of marrying (or presumably forming a civil partnership) would this leave either of your estates liable IHT on the first death?

turnitround

What will happen if for instance when one of you dies in later life giving the  other 5 years to give up the home? Will you both be able to finance finding somewhere else to live on 50% of the house value if you are perhaps in your 70's or 80's. Will you also want the trouble of moving house at that age?

theartfullodger

All sounds wise.

I've been told relationships never trip-up/fail & people never revise their wills.

Artful: Now on his 3rd successful marriage...

Good luck to all!

Ladylady1971

Keep_pedalling said:

That is expensive for a couple of wills with a trust clause in them. 

You say you have no intention of marrying (or presumably forming a civil partnership) would this leave either of your estates liable IHT on the first death?

Yep I thought it seemed a little expensive! I’m presuming yes, inheritance tax would kick in when the money was distributed? 

Keep_pedalling

Ladylady1971 said:

Keep_pedalling said:

That is expensive for a couple of wills with a trust clause in them. 

You say you have no intention of marrying (or presumably forming a civil partnership) would this leave either of your estates liable IHT on the first death?

Yep I thought it seemed a little expensive! I’m presuming yes, inheritance tax would kick in when the money was distributed? 

Requirement to pay IHT is within 6 months of your death. For a couple who are not married or in a civil partnership with this could force the surviving partner to have sell the house to pay it. 

Ladylady1971

Keep_pedalling said:

Ladylady1971 said:

Keep_pedalling said:

That is expensive for a couple of wills with a trust clause in them. 

You say you have no intention of marrying (or presumably forming a civil partnership) would this leave either of your estates liable IHT on the first death?

Yep I thought it seemed a little expensive! I’m presuming yes, inheritance tax would kick in when the money was distributed? 

Requirement to pay IHT is within 6 months of your death. For a couple who are not married or in a civil partnership with this could force the surviving partner to have sell the house to pay it. 

Keep_pedalling said:

Ladylady1971 said:

Keep_pedalling said:

That is expensive for a couple of wills with a trust clause in them. 

You say you have no intention of marrying (or presumably forming a civil partnership) would this leave either of your estates liable IHT on the first death?

Yep I thought it seemed a little expensive! I’m presuming yes, inheritance tax would kick in when the money was distributed? 

Requirement to pay IHT is within 6 months of your death. For a couple who are not married or in a civil partnership with this could force the surviving partner to have sell the house to pay it. 

Oh! I just assumed it would come out of the deceased person’s assets (going to family members) so the remaining person isn’t affected? 

RAS

Do you have sufficient other liquid assets to cover payment of the possible IHT bill?

They could be used to pay the IHT bill, but if you leave bequests to people other than  your partner:

a) Those bequests could fail
b) Your partner may have to sell the house to pay the other bequests.

Either way, someone could be unhappy

It may depend on the precise wording of the will so you need proper advice about the consequences before anyone starts drafting the will.

Ladylady1971

Thanks so much everyone - this prompted me to get multiple lines of advice! Ended up speaking to a very knowledgeable chap at Coop legal services who gave great advice which contradicted 3 other seemingly knowledgeable people. Decided upon a discretionary trust which obfuscated the need to come up with the inheritance tax within 6 months. Currently pinning down all the minutiae.