Advise on housing options

Lloyd90

I am doing some 'estate planning' with my parents who have appointed me LPOA for them both and just wanted some advice or guidance on the following:

My parents have been married approx 30+ years and are still together, they own the home they live in outright.

Currently the home is registered solely in my fathers name. My mother is not on the deeds etc. 

My parents are getting older (father especially) and having discussions about their future plans etc. My mum is a good bit younger than my dad and has stated she would "never put him in a home" if he declines (Yes, I am aware everyone says this, as I work in a field where we see lots of people go into care homes). 

Currently my thinking is that they need to change the ownership from solely in my father's name, to being in both my mother's and my father's name, 

Futher to this, we are then exploring options of whether this should be done as joint tenants, or tenants in common.

If going with tenants in common, then we have read that they can put that when one of them passes away, the 50% of the property they own can be passed to their children, with a stipulation that the remaining partner can live out their years in the home. 

If this was the case, does the 50% HAVE TO go into some sort of 'Property protection trust / family protection trust'? or can the 50% simply pass into ownership of the children? 

Any idea of the cost of setting up a trust in this way? Property value approx £800k - £850k.  

elsien

 I always worry about those conditions that the person can remain living in the home, because it ties them to it and sometimes people need to downsize/find somewhere move more suited to their changing needs. 

So I suggest that as part of that planning if they are looking at tenants in common, what would the plan be  if the surviving partner did want/need to move somewhere else - more easily accessible etc but couldn’t because then they would  have to hand over the other 50% of the house to the children instead of using it towards their new place. 

MarzipanCrumble

As an aside, with a property worth 850Kish your parents are nudging IHT limits.  What other assets do they own?  Would this take them over the 1 million mark?

I would suggest specialist advice from an IFA.

I agree with elsien too - your surviving pareDeaths nt maybe limiting their options.

I would also advise reading the Deaths and Funerals Board - https://forums.moneysavingexpert.com/categories/deaths-funerals-probate.

This will give a vivid and disturbing insight into how things can get very tricky if family members don't agree/have their own agenda.

Keep_pedalling

What you describe is an immediate post-death interest trust, which is quite a common arrangement. On the death of the first partner the legal ownership is split 50/50 between the trust and the surviving partner, but the surviving partner has beneficial ownership over the whole house. Elsien’s concern is easily dealt with a well written will. 

They should make an appointment with a local solicitor to discus their wills and the transfer of of the house into joint ownership.under no circmstsnces try to DIY this and they should also avoid unregulated will writers. 

The other option is to make them joint tenants with ownership passing by servivorship.  This is simpler and may be appropriate if they are of an age where remarriage is very unlikely to be an issue.

Lloyd90

MarzipanCrumble said:

As an aside, with a property worth 850Kish your parents are nudging IHT limits.  What other assets do they own?  Would this take them over the 1 million mark?

I would suggest specialist advice from an IFA.

I agree with elsien too - your surviving pareDeaths nt maybe limiting their options.

I would also advise reading the Deaths and Funerals Board - https://forums.moneysavingexpert.com/categories/deaths-funerals-probate.

This will give a vivid and disturbing insight into how things can get very tricky if family members don't agree/have their own agenda.

No just the house is their main asset. 

Apart from that my dad gets his state pension, my mum not pension age yet but we are their kids give them money to live off so they could give up work as didn’t want to see them work themselves to death. 

Lloyd90

Keep_pedalling said:

What you describe is an immediate post-death interest trust, which is quite a common arrangement. On the death of the first partner the legal ownership is split 50/50 between the trust and the surviving partner, but the surviving partner has beneficial ownership over the whole house. Elsien’s concern is easily dealt with a well written will. 

They should make an appointment with a local solicitor to discus their wills and the transfer of of the house into joint ownership.under no circmstsnces try to DIY this and they should also avoid unregulated will writers. 

The other option is to make them joint tenants with ownership passing by servivorship.  This is simpler and may be appropriate if they are of an age where remarriage is very unlikely to be an issue.

Thank you,

When setting up as tenants in common, do you have to have a trust in place for the 50% of the deceased? (Or is the trust there to protect the remaining partner allowing them to stay?). 

What is the difference with survivorship? Is that where they own 100% together and the house passes to the remaining partner fully when one passes? 

Thanks for your help. 

Brie

Should dad (or mom even) need help from the local authority the home would be ignored in any financial assessment.  This applies if the care is provided in the home or at a care home.  As far as I'm aware it doesn't matter that mom doesn't have her name on the deeds, it's still her home.  Should dad go into a care home she wouldn't be made to move and sell because it's her home.  As long as at least one of them is living there a financial assessment would be done on other assets (bank accounts) and income.  

If dad is much older is he getting attendance allowance?  And if so could mom be claiming carer's allowance?  If she's not accrued too much towards her own state pension this will boost what she eventually gets.  Sorry if you've got this already sorted - just thought I'd mention it in case it helps with their current finances.

Savvy_Sue

Brie said:

Should dad (or mom even) need help from the local authority the home would be ignored in any financial assessment.  This applies if the care is provided in the home or at a care home.  As far as I'm aware it doesn't matter that mom doesn't have her name on the deeds, it's still her home.  Should dad go into a care home she wouldn't be made to move and sell because it's her home.  As long as at least one of them is living there a financial assessment would be done on other assets (bank accounts) and income. 

Doesn't that depend on how old Mum is? I thought she'd need to be 60+ for that to be the case (and she may well be, but it's not clear). 

Note she wouldn't be forced to move, but the home won't necessarily be ignored. 

Lloyd90

Brie said:

Should dad (or mom even) need help from the local authority the home would be ignored in any financial assessment.  This applies if the care is provided in the home or at a care home.  As far as I'm aware it doesn't matter that mom doesn't have her name on the deeds, it's still her home.  Should dad go into a care home she wouldn't be made to move and sell because it's her home.  As long as at least one of them is living there a financial assessment would be done on other assets (bank accounts) and income.  

If dad is much older is he getting attendance allowance?  And if so could mom be claiming carer's allowance?  If she's not accrued too much towards her own state pension this will boost what she eventually gets.  Sorry if you've got this already sorted - just thought I'd mention it in case it helps with their current finances.

Thank you, we were aware the property would be disregarded for financial assessment when one person (spouse) remains which is highly likely to be my mum. 

She is 59 dad is 68. 

No AA but something similar and yes mum gets carers. 

Keep_pedalling

Lloyd90 said:

Keep_pedalling said:

What you describe is an immediate post-death interest trust, which is quite a common arrangement. On the death of the first partner the legal ownership is split 50/50 between the trust and the surviving partner, but the surviving partner has beneficial ownership over the whole house. Elsien’s concern is easily dealt with a well written will. 

They should make an appointment with a local solicitor to discus their wills and the transfer of of the house into joint ownership.under no circmstsnces try to DIY this and they should also avoid unregulated will writers. 

The other option is to make them joint tenants with ownership passing by servivorship.  This is simpler and may be appropriate if they are of an age where remarriage is very unlikely to be an issue.

Thank you,

When setting up as tenants in common, do you have to have a trust in place for the 50% of the deceased? (Or is the trust there to protect the remaining partner allowing them to stay?). 

No, the trust is automatically created by the will on the death of one of them, it does not exist until that point. The trust would need to be registered with HMRC within two years of the death unless the surviving spouse dies before the two years are up.

What is the difference with survivorship? Is that where they own 100% together and the house passes to the remaining partner fully when one passes? 

Thanks for your help. 

Yes, Joint tenants hold 100% together with the survivor automatically gaining sole ownership.

One other advantage of moving to joint ownership is that you would not need probate to deal with the ownership transfer if your father was to die first. 

Lloyd90

Keep_pedalling said:

Lloyd90 said:

Keep_pedalling said:

What you describe is an immediate post-death interest trust, which is quite a common arrangement. On the death of the first partner the legal ownership is split 50/50 between the trust and the surviving partner, but the surviving partner has beneficial ownership over the whole house. Elsien’s concern is easily dealt with a well written will. 

They should make an appointment with a local solicitor to discus their wills and the transfer of of the house into joint ownership.under no circmstsnces try to DIY this and they should also avoid unregulated will writers. 

The other option is to make them joint tenants with ownership passing by servivorship.  This is simpler and may be appropriate if they are of an age where remarriage is very unlikely to be an issue.

Thank you,

When setting up as tenants in common, do you have to have a trust in place for the 50% of the deceased? (Or is the trust there to protect the remaining partner allowing them to stay?). 

No, the trust is automatically created by the will on the death of one of them, it does not exist until that point. The trust would need to be registered with HMRC within two years of the death unless the surviving spouse dies before the two years are up.

What is the difference with survivorship? Is that where they own 100% together and the house passes to the remaining partner fully when one passes? 

Thanks for your help. 

Yes, Joint tenants hold 100% together with the survivor automatically gaining sole ownership.

One other advantage of moving to joint ownership is that you would not need probate to deal with the ownership transfer if your father was to die first. 

Re the trust being automatically created on death, do you have to have that? Or is that optional? 

Can your 50% of your property simply pass to you children whilst the other 50% remains in the owner ship of your spouse? Thus avoiding the need to have a trust etc, or would it have to go into trust? 

Am I right in thinking the trust is just there to protect the surviving spouse’s interest in the property? Eg they can’t be forced to sell it and move out etc whilst alive.