Universal credit pip, house and inheritance

Grumpy_chap

peteuk said:

Apologises didn’t notice the £250K each…

House £450K
Savings £500K

Total estate £950K

Inheritance tax threshold £500K (due to house being passed to child/estate is less than £2m) 
Then if right there is still an inheritance tax of 40% on £450K which is £180K…

Which leaves the cash sum to be reduced £320K or £160 each. If tax is paid from the savings as that is the usable assess unless you sell the house and pay a sum towards the tax and then buy a new house….

Or I may be wrong!  Who knows. 

Assuming that on the death of the first parent, everything passes to the second parent, then the first parent has used none of their IHT allowance.
When the second parent departs, there will be two IHT allowances available, total £1M so no IHT liability arising.

The bigger thing in this arrangement is how much of the £500k cash will have been spent by the parents before death on living their lives to the full and any care costs that may be required.  This could leave the OP to inherit the full £450k house and the two siblings to inherit zero remaining cash.

[Deleted User]

1)Just on this I will look after my parents when they get old in the house, they will not go to a care home.  If I need any money spent on my parents and I don't have it I will ask my brother or sister.

2) if the house was transferred into my name now instead of when they die, would this affect my UC or pip in anyway

Bigwheels1111

A correction to the will would solve some of the issues.
Some kind of trust maybe.
Or when one parent passes. The house gets split, 50% Mum, 16.66% to each of the 3 kids.
That would also stop it being sold for care funding.
But that’s a whole other ball game is it not.

peteuk

[Deleted User] said:

1)Just on this I will look after my parents when they get old in the house, they will not go to a care home.  If I need any money spent on my parents and I don't have it I will ask my brother or sister.

2) if the house was transferred into my name now instead of when they die, would this affect my UC or pip in anyway

1) You can not 100% say that, anything can happen and they need nursing or medical care above and beyond what you or social services can provide.  With £500K in their accounts they will not likely get funding for any care.  

2) Giving you the house now will not effect your pip in anyway, shape or form.  You can be Elton John and claim PIIP.  However should your parents be suffering any illlness that has the potential to lead to them being in a care or nursing home, then it may be seen as they knew what they were doing and could be classes of deprivation of capital.  This can be upto 6 or 7 years after the effect.  As for Simply giving you the house, you live in it and as such owning it wont effect your UC. 

HillStreetBlues

Bigwheels1111 said:

A correction to the will would solve some of the issues.
Some kind of trust maybe.
Or when one parent passes. The house gets split, 50% Mum, 16.66% to each of the 3 kids.
That would also stop it being sold for care funding.
But that’s a whole other ball game is it not.

As it currently  stands the house can't be included in care calculations, even if both parents go into care.

born_again

[Deleted User] said:

1)Just on this I will look after my parents when they get old in the house, they will not go to a care home.  If I need any money spent on my parents and I don't have it I will ask my brother or sister.

A very understanding person. But given you are in receipt of PIP, would you be able to manage without assistance of carers.
Which given the transfer of property to you could rule out council funded care.
Care is not cheap. Will Brother & Sister be happy to pay? It is very draining. Been there done that, even with 4 carer visits a day. Ended up having to give up & sending mother to a care home for my own sanity. Actually a better environment for her.
Now carer for wife. Not as hard, but is still very taxing, when you have no ME time..

elsien

[Deleted User] said:

1)Just on this I will look after my parents when they get old in the house, they will not go to a care home.  If I need any money spent on my parents and I don't have it I will ask my brother or sister.

2) if the house was transferred into my name now instead of when they die, would this affect my UC or pip in anyway

My aunt said this.  And paid carers to come in to help. Until it got to the point where her husband with dementia was urinating all over the house, up all night, leaving the house and getting lost, panicking when she wasn’t in immediate view so she couldn’t leave him with other people to have time for herself.  and declining respite daycare. 

She ended up having a stroke triggered by the stress, at which point there was no option but for him to move to residential care. 

Some people manage it and it works although with huge stress on the carer. For other people, the impact of the dementia is such that it’s not possible for one person to manage without becoming very ill themselves.
keeping family at home is something to aim for, but it’s never guaranteed. 

Grumpy_chap

[Deleted User] said:

1)Just on this I will look after my parents when they get old in the house, they will not go to a care home.  If I need any money spent on my parents and I don't have it I will ask my brother or sister.

Your intent is positive.  Reality may prevent you from providing the care that is required.  None of us can predict what level of care your parents may require or for how long.

I am confused by the need to ask your siblings for money to care for your parents.  Won't your parents fund any care from the £500k they have as stated upthread?

[Deleted User] said:

The house is worth £450k and the money is around 250k each

born_again

Grumpy_chap said:

[Deleted User] said:

1)Just on this I will look after my parents when they get old in the house, they will not go to a care home.  If I need any money spent on my parents and I don't have it I will ask my brother or sister.

Your intent is positive.  Reality may prevent you from providing the care that is required.  None of us can predict what level of care your parents may require or for how long.

I am confused by the need to ask your siblings for money to care for your parents.  Won't your parents fund any care from the £500k they have as stated upthread?

[Deleted User] said:

The house is worth £450k and the money is around 250k each

But the house no longer belongs to the parents, does it, as transferred to son.😜 No offense to anyone.

elsien

[Deleted User] said:

1)Just on this I will look after my parents when they get old in the house, they will not go to a care home.  If I need any money spent on my parents and I don't have it I will ask my brother or sister.

2) if the house was transferred into my name now instead of when they die, would this affect my UC or pip in anyway

For what purpose, exactly?