house trust

Albermarle

dunstonh said:

twinsister said:

I did look up deprivation of assets and it doesn't look as if it is worth it, we will just have to try and die at home.
Thank you all.

Most people die outside of care homes.   Going into care is something that people worry about too much compared to the statistical likelihood.  Care in your own home is far more common.

Yes, but if it is at a high level, then it  is also expensive.

Sarahspangles

twinsister said:

Hi everyone, can anyone tell me if it is wise or even safe to put my house in trust for my two sons aged 48 and 52. my husband and I are 75 and 77years old and in relatively good health.

There are lots of practical things you can do now to increase your chances of not needing residential care.

Many people move to a care home after spending time in hospital. Often they really want to go home, and could manage with family help or carers, but their home isn’t suitable and can’t be adapted sufficiently quickly. Whereas bungalows with step free entry and walk in showers can easily be upgraded with grab handles and similar aids.

Keep_pedalling

twinsister said:

I did look up deprivation of assets and it doesn't look as if it is worth it, we will just have to try and die at home.
Thank you all.

The really scary thing (for me at least) would be needing residential care or live in carers would be to have to depend on a cash strapped LA to pay for it. This would be a problem if your home is your only major asset at in one of you needs the care and the other still needs it as a home in which case it will be disregarded, but from personal experience I know care will only be funded once you become decrepit enough to get past the funding panel. If on3 of need residential care after the other dies then you will be self funding so will have a much better choice available to you and will be able to get the care earlier.

There is a half way house you can take and that is making new wills that create an immediate post death interest trust on the first death. The trust does not come into effect until one of you dies at which point a trust is created that holds the legal ownership of the deceased half of the house and the surviving spouse maintains a beneficial interest in that half. The eventual beneficiaries won’t actually inherit until the second spouse dies. This protects the survivor’s security and your beneficiaries inheritance from care cost or the survivor marrying again and failing to make a new will.

This only falls down if you both need residential care at the same time. 

eltisley98

Keep_pedalling said:

No, it would be a very foolish thing to do. It won’t help with IHT (look up gift with reservation of benefit) and it won’t avoid care costs (look up deliberate deprivation of assets and over my dead body grange).

Having your house in trust also complicates things if you ever need to move and potentially creates a CGT liability when the house is actually sold.

In your position the only type of trust to consider would be an immediate post death interest trust which would protect the share share of the home of the first spouse to die, should the survivor need care or decided to marry again. This requires you hold the house as tenants in common, and have a clause in your will that sets up the trust on your death. Do you have wills and lasting powers of attorney in place?

Incidentally, we have been thinking about changing our mirror wills to a life interest trust will. This thread has got me a bit alarmed. 

For record, the purpose is not to avoid IHT or to avoid paying care home fees (haven't thought that far!), but to leave our respective shares of the house to children if one of us dies, while the surviving partner can still live in the property indefinitely. It all sounds reasonable. But is that the same thing as what OP asked here, namely putting the house into a trust?

Apologies for hijacking this thread and thanks in advance.

Sarahspangles

eltisley98 said:

Keep_pedalling said:

No, it would be a very foolish thing to do. It won’t help with IHT (look up gift with reservation of benefit) and it won’t avoid care costs (look up deliberate deprivation of assets and over my dead body grange).

Having your house in trust also complicates things if you ever need to move and potentially creates a CGT liability when the house is actually sold.

In your position the only type of trust to consider would be an immediate post death interest trust which would protect the share share of the home of the first spouse to die, should the survivor need care or decided to marry again. This requires you hold the house as tenants in common, and have a clause in your will that sets up the trust on your death. Do you have wills and lasting powers of attorney in place?

Incidentally, we have been thinking about changing our mirror wills to a life interest trust will. This thread has got me a bit alarmed. 

For record, the purpose is not to avoid IHT or to avoid paying care home fees (haven't thought that far!), but to leave our respective shares of the house to children if one of us dies, while the surviving partner can still live in the property indefinitely. It all sounds reasonable. But is that the same thing as what OP asked here, namely putting the house into a trust?

Apologies for hijacking this thread and thanks in advance.

There are Trusts and Trusts. The kind you describe is an Immediate Post Death Interest Trust. These are widely used by co-owning spouses and are useful because they avoid some of the ‘gotchas’ of other arrangements. There is no CGT for the children to pay* and if they don’t currently own a property they don’t lose their first time buyer status.

* I occasionally hear about children who insist on registering their ownership rather than relying on the trust. These are not the smart children.

eltisley98

Sarahspangles said:

eltisley98 said:

Keep_pedalling said:

No, it would be a very foolish thing to do. It won’t help with IHT (look up gift with reservation of benefit) and it won’t avoid care costs (look up deliberate deprivation of assets and over my dead body grange).

Having your house in trust also complicates things if you ever need to move and potentially creates a CGT liability when the house is actually sold.

In your position the only type of trust to consider would be an immediate post death interest trust which would protect the share share of the home of the first spouse to die, should the survivor need care or decided to marry again. This requires you hold the house as tenants in common, and have a clause in your will that sets up the trust on your death. Do you have wills and lasting powers of attorney in place?

Incidentally, we have been thinking about changing our mirror wills to a life interest trust will. This thread has got me a bit alarmed. 

For record, the purpose is not to avoid IHT or to avoid paying care home fees (haven't thought that far!), but to leave our respective shares of the house to children if one of us dies, while the surviving partner can still live in the property indefinitely. It all sounds reasonable. But is that the same thing as what OP asked here, namely putting the house into a trust?

Apologies for hijacking this thread and thanks in advance.

There are Trusts and Trusts. The kind you describe is an Immediate Post Death Interest Trust. These are widely used by co-owning spouses and are useful because they avoid some of the ‘gotchas’ of other arrangements. There is no CGT for the children to pay* and if they don’t currently own a property they don’t lose their first time buyer status.

* I occasionally hear about children who insist on registering their ownership rather than relying on the trust. These are not the smart children.

Many thanks for your clarification. I didn't make a connection between the life interest trust and the post death interest trust, but now this makes sense to me.

Moonwolf

Is it true that a trust can be used to protect the interest of step children as well?  If the natural parent wants to ensure that the step parent doesn't cut step children out of the mirrored will after the natural parent dies, a trust can be used?

Pollycat

Very interesting thread on a different board:
Can I take my house out of Trust? — MoneySavingExpert Forum

Cobbler_tone

I struggle with this kind of commentary.
As a son of elderly parents my inheritance is the last thing on my mind. They have the assets and (moderate) wealth to do whatever they need to do and of course I will physically support where I can.
I have never for one second thought "Should I try and get their house signed over?"

If either needs care at a couple of grand a week I am sure they can sustain themselves for a good while. If it comes to selling their house to fund additional needs I'll face that at the time.

My (absolutely minted millionaire) neighbour cared for his dad (who lived 4 doors away from him) for the past 5 years of his life.
It was only the last 4 months that his health deteriorated and he stayed at home. He owed his dad's house from years back, made sure his dad had less than £20 odd grand in the bank and got everything funded, from adapting the home, a new bed and in the end round the clock care until he passed away. Financially after he passed away it was probably arguable whether he was better off or not after stumping up the CGT on the house. The moral of that story is no matter how much money you have you can still be tight!!

This is all why I am going to sit in my sun filled garden and pop a pill when the time comes!