Putting Mums house in my name - benefits

Mattpoker

Hello, any help or advice much appreciated:

I live at my mums (she's mortgage free) with my two kids. Both kids are autistic and I work one day a week, the other 4 taking care of my children's needs. 

She wants to place her house in my and my sisters names. Would I lose my benefits? 

Is there a better solution? She wanted to initially take equity from the house but has decided against it. Then about downsizing and we live near each other. But she wants to live with us, so is now wanting to keep the house and sign it over and she live here always (unless needing care but right now, she's fine, able to drive etc).

TonyMMM

Mattpoker said:

She wants to place her house in my and my sisters names. Would I lose my benefits? 

Is there a better solution? 

Why does she want to do it ( it almost certainly isn't a good idea) ?

A better solution ?  - depends really on what she is trying to achieve  ?  

sheramber

Has she made a will?

She can leave it to you both in her will.

Keep_pedalling

This would be a very foolish thing to do for several reasons, the primary one being her long term security, which could be threatened if you or your sibling die before her her, run into financial difficulty or get involved in a messy divorce.

Also look up deliberate deprivation of assets.

Olinda99

yes the key question here is most definitely why is she doing it what does she want to achieve

Mattpoker

She's 76 and worried that the care home, if she were ever to go in one, would swallow the money her and Dad had in the house. She wants the house kept in the family.
She was suggesting signing the house over but have it written thru solicitors that she can't be evicted so we all know where we are.

400ixl

This is not a good idea on many fronts.

1) She will be seen as having deprecated assets - https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/
2) she may (if above is not identified) only get the care the Local Authority is willing to pay for which is not allways very good. Do you want to see your mother in that position
3) If care needs didn't occur she would be swapping potential tax free inheritence for you both into Capital Gains tax liability.

There are recent threads on this same topic as recently as this weekend which go into detail about why this is a bad idea.

Mattpoker

Thank you, I will better search for those now then.

Keep_pedalling

With dependant relatives living with her, it is likely the house would be disregarded in any financial assessment anyway.

theoretica

Also, situations change, and you or your sister might want to move. Owning her house while *not* living in it would open up a heap of complications for benefits, capital gains tax, stamp duty...

Grumpy_chap

In the case of your mother transferring the house to you and your sister, in the short term this is likely to be DoA (Deprivation of Assets) or GwR (Gift with Reservation).  Would your mother continue living in the house after making the gift?

As well as your mother, you and your two children living at the house, does your sister also live there?  If not, will you all pay rent to your sister for her half of the house?  Does your sister want the obligations of being a landlord?

I suspect your benefits would be unchanged, except for a change to any Housing Benefit element that you may receive now (if any).

If you or, perhaps more relevant, your sister claim benefits and own a house that is not your home, that house (or half house) will be treated as capital and potentially reduce any benefits.  
What if you, or your sister, go through a divorce or relationship breakdown?  That half house will be an asset of the marriage and forced sale may be possible.

If the house remains in your mother's name, it is likely to be disregarded as an asset with dependent relatives living there.  

Lots of complications that you may not have considered at first.

EDIT TO ADD:
If the sister does not live in the house, she will likely incur CGT liability as and when the house is eventually sold, so avoiding care-costs and / or IHT will see one tax replaced with another...