Putting a trust on parents bungalow

Yorkie1

It is also increasingly difficult, I have found, to insure properties in trust.

jimjames

I would also suggest a search on here for problems with dodgy trust companies. There was one I recall where the properties were in trust but trustees were only from the company so the owners had lost control of their own property.

Bigwheels1111

Yorkie1 said:

It is also increasingly difficult, I have found, to insure properties in trust.

My mum has just found that out. 3 times the cost to insure.

Was tenants in common before my dad passed away i think it was called.

That way they could only go after half the house.

If one went into care.

lisyloo

Bigwheels1111 said:

Yorkie1 said:

It is also increasingly difficult, I have found, to insure properties in trust.

My mum has just found that out. 3 times the cost to insure.

Was tenants in common before my dad passed away i think it was called.

That way they could only go after half the house.

If one went into care.

I'm sure they didn't do it for that reason as that would be deliberate deprivation of assets (in which case local authority can still go after the other half).
I'm sure they did it to avoid inheritance tax on second death and hopefully the solicitors have that a record of that advice.
It's not an unusual arrangement.

phillw

I think it worked for a while, until they got wind of it.
It's one of those things you will only find out if you got away with it when your parents are dead and there is nothing you can do about it.

xylophone

It is perfectly legitimate for a married couple to own their property as tenants in common (ie, each has a beneficial interest in half the property) and each  tenant in common to bequeath his/her beneficial interest outright to another party or to leave it in life interest trust to the surviving spouse, ultimately to pass to another person (often offspring) when he/she too passes on.

https://garner-hancock.co.uk/wealth-protection/what-is-a-life-interest-trust/#:~:text=In order to create such,interest in the others 50%.

LHW99

That way they could only go after half the house. If one went into care.

As I understand it, the house value is disregarded if there is a spouse alive and living there.

Cornish_mum

Just to comment on this thread as xylophone says an IPDI trust can be a valid and useful approach in certain circumstances.

For example my husband and I have instructed one as a result of my recent aggression cancer diagnosis (age 43), two young children and the likelihood of his remarriage after my passing. The aim in my case is to ensure my dependent children are provided for as I intend. Our arrangement saves no tax and has no implications for the payment of my care costs. 

My IL have also instructed a similar trust for their UK assets because of dual nationality, assets in two countries (UK Portugal) and forced inheritance laws in Portugal (in which children have a legal right to inherit a share of assets). This is harmonise their UK and Portuguese wills to make the legal process after they pass easier. Again no aim to save tax or avoid paying any care costs.

 In both cases we use a solicitor with relevant experience for our circumstances. 

badger09

xylophone said:

It is perfectly legitimate for a married couple to own their property as tenants in common (ie, each has a beneficial interest in half the property) and each  tenant in common to bequeath his/her beneficial interest outright to another party or to leave it in life interest trust to the surviving spouse, ultimately to pass to another person (often offspring) when he/she too passes on.

https://garner-hancock.co.uk/wealth-protection/what-is-a-life-interest-trust/#:~:text=In order to create such,interest in the others 50%.

Absolutely! Husband & I own our home in this way to ensure that both his son & my son’s interests are protected. We trust each other completely and know the survivor would never do anything to disadvantage their stepson, but 3rd parties can enter the equation, & ‘mirror’ wills can be changed. Unlikely as we’re both in our 70s but was done over 30 years ago. 

@Cornish_mum’s post perfectly illustrates why this arrangement might be sensible. It is motivated not by tax saving or care fee avoidance, but is simply a parent’s desire to protect their offspring. I’m sorry she even has to consider this. 

FlorayG

@Liz65 I think if he is trying to 'keep it from the government' you are correct, it won't do that and any arrangement that tries to will be complex and expensive and not worth the hassle.
If he simply wants to protect your inheritance, best of luck in convincing him that his comfortable old age is more important to you than your inheritance - I persuaded my mom eventually but it wasn't easy ( and in the end she died quickly at home and I got the inheritance anyway, but that's just luck)