Making a will & putting house in trust - but diff reason fetched to light

Marcon

Spendless said:

Don't think IHT angle has even been considered. I know the property, I'd say at current value it's worth approx £300K. No idea and neither does friend of what money her parents have. 

Which is why it's so important to let the solicitor have all relevant facts...

Spendless

Marcon said:

Spendless said:

Don't think IHT angle has even been considered. I know the property, I'd say at current value it's worth approx £300K. No idea and neither does friend of what money her parents have. 

Which is why it's so important to let the solicitor have all relevant facts...

This is where friend is getting stuck. Shes pointed out to her Mum that the solicitor is making suggestions not based on the whole story.
Mum is adamant that she is unable to tell solicitor the truth as appointments are joint ones with her husband.
Due to the advice here friend is going to ask her Mum if the solicitor is talking about changing their property to TIC or talking about something else. 

Silvertabby

Would it be possible for mum and daughter to make an appointment with the solicitor without dad knowing?

Certainly not the first time this has cropped up.  I can recall one case in which an former work colleague had similar reservations.  In her case, she left her half of the house to her son,  but with her husband having the right to live there for the rest of his life - or until he either remarried, cohabited or decided to move, at which point the property was to be sold and her son given his inheritance.

Spendless

@Silvertabby - that would be the ideal but I believe time is of the essence here.

Mum had no idea daughter was going to object. I think she thought shed swallow the 'avoiding care home fees' line and think it a good idea. Its that daughter hasnt thats forced Mum to reveal her hand.

*IF* this is TIC that has been mentioned and just not explained well, can someone explain to me how IHT works in that scenario, so i can give info to friend.

I would say the estate currently falls within IHT if the wills make daughter and grandchildren beneficaries. 

Friend's husband is of the view to friend, that clearly her Mum has sufferred in silence throughout her marriage and if the only peace of mind her Mum has is to put her property in trust then let her. Friend is just worried about an expensive chaotic mess being left behind. 

Spendless

Sorry cant quote myself as on phone. Meant to say currently the whole estate wouldnt attract IHT if left to daughter  and grandkids. 

Spendless

Update - Friend has visited her parents over the weekend and asked again diplomatically and tactfully what they mean. This prompted her Dad to get the info out and there at the bottom of the letter, friend read the words that it was to change the tenancy of the property from Joint tenants to TIC


So friend has (mostly) stopped panicking. She does have a variety of emotions over it all including that she asked her parents several times if they were talking about becoming tenants in common and each time got told No ( they can't have understood the terminology IMO) which has led to her probing more and feels she forced her Mum's hand to reveal a secret that she'd have perhaps preferred to take to the grave. Friend does still have some reservations about this mostly because she's not the sole beneficiary of her parents wills, so thinks there's a potential for a problem with the younger generation of beneficiaries but also accepts that her Mum's fears 'out trump' (for want of a better word) any of her own and gives her Mum peace of mind.

Thanks to the people that helped especially the early reply as it sounds like this was spot on what the solicitor had recommended. 

RAS said:

Since this is mum's problem and mum is trying to protect the daughter's inheritance, the logical thing would be to sever the tenancy on the property, if it's currently owned as a joint tenancy, and for mum to leave her half to her daughter. That means that if dad remarries, one half of the property value is secured for the daughter.

This is usually accompanied by an immediate post death trust, which allows dad to live in the house subject to some conditions. These vary but can allow him to downsize, or receive interest on the capital if he goes into care. 

RAS

Thanks. Even if there wasn't an additional problem, this solution is often recommended for couples anyway.

It is extremely easy to find out if the property is a joint tenancy or tenants in common. Costs the princely sum of £3 to check the Land Registry on the gov.uk website. If it refers to "no disposition by a sole proprietor..." it's TIC.

It's taking up to 18 months for the Land Registry to update some files at present. If it was only made TIC when the will was made recently, it may not show up yet but it's worth checking that the solicitor has actually registered the change as we've had at least one recent case where they failed to do so which meant the second wife gained the whole property.

And suggest your friend relaxes. Using TIC and a post death trust does not change legal ownership. That's why it's used. So the younger generation won't have issues round benefit rights, First buyer status, CGT or any means to lever equity out of the house until the second owner dies. 

It may be sensible in this case if after the first death the friend ensures she and the surviving parent are registered as the trustees. And legally these trusts now need to be registered with HMRC within 2 years of the first death.