Placing a home into a trust as part of will planning

tls123

I would try to frame the conversation into giving the grandchildren money now (assuming she has savings as well as a house) she could gift them a lump sum and their parents could invest/save depending on their attitude to risk in a junior isa. A lot of people are worried about their houses and care costs but as lots of posters have said it is not easy and expensive to set up trusts. Has you MIL a will and who is her estate left to? 

poseidon1

tls123 said:

I would try to frame the conversation into giving the grandchildren money now (assuming she has savings as well as a house) she could gift them a lump sum and their parents could invest/save depending on their attitude to risk in a junior isa. A lot of people are worried about their houses and care costs but as lots of posters have said it is not easy and expensive to set up trusts. Has you MIL a will and who is her estate left to? 

Deprivation of capital for future care costs purposes?

 Can't see how this proposal any different from gifting house in trust, indeed probably worse since those savings would have been the first to have been eaten up by care costs.

Olinda99

Always remembering 'putting x in trust so the kiddies get it' equals 'someone else should pay for my care'

tls123

poseidon1 said:

tls123 said:

I would try to frame the conversation into giving the grandchildren money now (assuming she has savings as well as a house) she could gift them a lump sum and their parents could invest/save depending on their attitude to risk in a junior isa. A lot of people are worried about their houses and care costs but as lots of posters have said it is not easy and expensive to set up trusts. Has you MIL a will and who is her estate left to? 

Deprivation of capital for future care costs purposes?

 Can't see how this proposal any different from gifting house in trust, indeed probably worse since those savings would have been the first to have been eaten up by care costs.

You are allowed to make gifts each year without it being classed as depreciation of assets if the mother in law is wealthy enough for a trust then I assume she has other assets other than a house. I disagree my suggestion is worse without any of us knowing the MIL full financial circumstances. 

Keep_pedalling

tls123 said:

poseidon1 said:

tls123 said:

I would try to frame the conversation into giving the grandchildren money now (assuming she has savings as well as a house) she could gift them a lump sum and their parents could invest/save depending on their attitude to risk in a junior isa. A lot of people are worried about their houses and care costs but as lots of posters have said it is not easy and expensive to set up trusts. Has you MIL a will and who is her estate left to? 

Deprivation of capital for future care costs purposes?

 Can't see how this proposal any different from gifting house in trust, indeed probably worse since those savings would have been the first to have been eaten up by care costs.

You are allowed to make gifts each year without it being classed as depreciation of assets if the mother in law is wealthy enough for a trust then I assume she has other assets other than a house. I disagree my suggestion is worse without any of us knowing the MIL full financial circumstances. 

That assumption is likely to be wide of the mark, these sort of trusts have often been taken out by people whose house is their only significant asset. The cost of doing this is going to be a few thousand and people have often been sold these trusts by unregulated sharks whose only real interest is getting those fees.

People who can help their children with significant cash gifts are not the ones who generally do this. 

CapricornLass

There is nothing to stop her gifting up to £3k each year to be split amongst the grandchildren.  Perhaps into a junior ISA? Or some other savings vehicle? A pension?

doodling

Hi,

CapricornLass said:

There is nothing to stop her gifting up to £3k each year to be split amongst the grandchildren.  Perhaps into a junior ISA? Or some other savings vehicle? A pension?

From an inheritance tax point of view you are correct.  Gifts as you describe will probably not fall within the taxable estate.

From a deprivation of assets point of view you may be wrong.  Depending on the total assets held then the council may assess you on the basis that you still have that money when working out what funding you will receive for care. 

Olinda99

Just out of curiosity and I have often wondered what happens if they do decide that you still have that money when working out the funding you receive for care, and that funding is therefore not enough for care

what happens as you obviously don't have the money even though they assess that you do ?

Mojisola

Olinda99 said:

Always remembering 'putting x in trust so the kiddies get it' equals 'someone else should pay for my care'

And that you won't be able to chose which home you end up in and it may well be the cheapest available and not somewhere you would want to spend your last months.

Mojisola

philiusfogwakey said:

My mother-in-law would like to place her home into a trust for her 4 grandchildren so that she doesn't lose it if her health continues to deteriorate, and for it to be their inheritance gift when she dies.

Where do we start in helping her do this, as she will expect my wife and I to get the wheels in motion and sort this out for her? Do we need a financial advisor, or a specific type of solicitor?

As you can see from the replies, this isn't a good idea.

She may be reassured if she realises most people don't need residential care and the average time spent in a home is around two years (some much longer but many just a matter of months).

If she expects you to help her with these kind of things, the most important first step is to get power of attorney paperwork done while she is mentally capable.