Form A Restriction and care fees

dave3dtg

Hi.

My parents were TIC so there's a Form A Restriction on the title of their house. My Dad did this (2007) for IHT purposes and to protect his beneficial interest which he bequeathed to my 2 brothers and I in equal shares.

He died in April 2020 so the legal title is now 100% my Mum's.

She has now had a Section 3 placed on her and is presently in hospital. Both my brothers are LPA's for finance and property. 

One of my brothers is now saying the house needs to be sold to pay for her care. He's also requesting that I forfeit our respective shares of Dad's beneficial interest to help pay for her care.

I appreciate that Mums beneficial interest can be used for her care.

Can this be done?

Is my Dad's half even available? I was under the impression that Dad's beneficial interest will only pass to us upon the death of Mum?

Is it even possible to sell a house with a Form A Restriction on it?

Thanks in advance.

Keep_pedalling

Presumable your fathers will placed his share of the house in trust with your mother having a life interest. she would be the beneficial owner of the whole house but the legal owner of 50% (The trust holds the other 50%) 

Now she has moved out, the house can be sold with 50% of the proceeds going to your mother and the other 50% retained in trust with the income being available for your mother but not the capital.

Selling the house can be done with the agreement of the trustees and your mother or here attorneys, which raises another question does your mother have a financial LPA in place?

I have made some assumptions here and much depends on the terms of the trust as payed out in your fathers will.

On a side note this sort of arrangement does not reduce IHT, but it does protect 50% of the house from care costs for the surviving spouse and from the spouse remarrying. Your sibling seems to want to prioritise your mother’s care over any inheritance he might eventually receive it is your choice if you want to do the same.  

What is the value of the house? Care costs will quickly eat up 50% of proceeds of a house worth £100k but funds are unlikely to run out on a £500k house.

jonnydeppiwish!

I don’t know anything about the legal side but kudos to your brother for thinking about your mother’s needs and care, rather than financially benefiting later down the line. 

Respect.

dave3dtg

Keep_pedalling said:

Presumable your fathers will placed his share of the house in trust with your mother having a life interest. she would be the beneficial owner of the whole house but the legal owner of 50% (The trust holds the other 50%) 

Now she has moved out, the house can be sold with 50% of the proceeds going to your mother and the other 50% retained in trust with the income being available for your mother but not the capital.

Selling the house can be done with the agreement of the trustees and your mother or here attorneys, which raises another question does your mother have a financial LPA in place?

I have made some assumptions here and much depends on the terms of the trust as payed out in your fathers will.

On a side note this sort of arrangement does not reduce IHT, but it does protect 50% of the house from care costs for the surviving spouse and from the spouse remarrying. Your sibling seems to want to prioritise your mother’s care over any inheritance he might eventually receive it is your choice if you want to do the same.  

What is the value of the house? Care costs will quickly eat up 50% of proceeds of a house worth £100k but funds are unlikely to run out on a £500k house.

Nope. Mum is the 100% owner of the legal title but has 50% beneficial interest with the other 50% having been bequeathed by Dad to my brothers and I. This is how the TIC works...to protect an estate for beneficiaries.

With TIC comes a Form A restriction stopping a legal owner from acting alone in selling the property and pocketing what the deceased spouse intended their beneficiaries to have. This includes care costs protection. My Dad clearly wanted this so my brothers and I at least had something and the whole house didn't get swallowed in care costs for the surviving spouse.

There is a whole industry aimed at setting up Wills and Trusts to avoid care fees. Solicitors make a lot of money charging people a packet to set their Will's up to avoid inheritance tax and care costs. Plenty of rich people will avoid care costs.

Both my brothers are LPA's for both financial and property and health. They threatened to walk away from Mum if I was involved even as a reserve.

My sibling hasn't stated it's what he wants...he has just asked me if I'd do it. It's all about the optics and how he looks or rather how bad he can make me look. Trust me, if I don't agree to going against my Dad's Will then he'll make sure everyone knows it. Neither of them approve of me because I haven't been as successful as them, because I fell on hard times, because I was a househusband then single Dad so stayed at home mostly, because I didn't go to Uni or obtain an HNC in something, because I've had low paid jobs. Yet I was the one driving my mum to see my Dad every day for 10 weeks and fed him his meals. I was the one who took my mum shopping twice a week, to the hair dressers, to hospital and doctor appointments for 3 years. They did nothing. Yet I am the one who's judged because I'm poor and slogging my guts out for £10/hour. FYI I had some lovely last moments with my Dad. I was removed from our Uncle's Will for the same reasons, my brothers were instructed to share the £10K they each got with me...so £6666 each. They point blank refused and a lie was concocted about Uncle paying all his money for cancer treatment. I found out 8 years later when my Dad, in a lucid moment, apologised for his brother removing me...when the grief of my Dad's passing had subsided I purchased my uncles Will and found that he left £355K and it was clear I had been removed...to be replaced by Oxford Uni. My 4 cousins got the remaining £335K to share.

House is worth between £600K-700K.

All I really want to know is as my Dad's Will is protected are the proceeds for his beneficial interest kept in trust until my Mum passes? Making them unavailable for her care anyway?