Wills / Financial Planning

Smidge1524

Can I be forced to sell property to fund care costs? 

RAS

Who gets the Spanish property?

Keep_pedalling

Smidge1524 said:

Can I be forced to sell property to fund care costs? 

That is usually only the case if you have no other assets but you have another property so if you ever need residential care you hopefully will have funds to cover that.

Also if both you and your partner are living in the UK home and you need residential care the house would be disregarded in any financial assessment as it is your partners home as well. 

Keep_pedalling

Smidge1524 said:

I am very nervous giving personal information on the internet! However, I am widowed, so is my partner. We live together in both properties as man & wife and have done for 12 years. He shares all costs; maintenance & living. Uk property £260k. May return to uk permanently within 5 years. Partner has his own income via his pensions. Don’t want him homeless if I die first. Don’t want to leave anything to him as he has no family.

As you are widowed your estate can take advantage of the transferable NRB from your deceased spouse so up to £650k, well over your current your UK assets so I don’t think you need worry about IHT.

What you could do with your will is leave your house to your family and give your partner a life time interest. This would, on your death, create an immediate post death interest trust that would allow him to live there for as long as he needs and protect your family’s inheritance. I recomend you consult a STEP qualified solicitor for this, and if you do it, consider marring your partner or forming a civil partnership as this can lead to being hit with an IHT and CGT liability that would not apply to married couples or civil partners.

Savvy_Sue

Keep_pedalling said:

Smidge1524 said:

I am very nervous giving personal information on the internet! However, I am widowed, so is my partner. We live together in both properties as man & wife and have done for 12 years. He shares all costs; maintenance & living. Uk property £260k. May return to uk permanently within 5 years. Partner has his own income via his pensions. Don’t want him homeless if I die first. Don’t want to leave anything to him as he has no family.

As you are widowed your estate can take advantage of the transferable NRB from your deceased spouse so up to £650k, well over your current your UK assets so I don’t think you need worry about IHT.

What you could do with your will is leave your house to your family and give your partner a life time interest. This would, on your death, create an immediate post death interest trust that would allow him to live there for as long as he needs and protect your family’s inheritance. I recomend you consult a STEP qualified solicitor for this, and if you do it, consider marring your partner or forming a civil partnership as this can lead to being hit with an IHT and CGT liability that would not apply to married couples or civil partners.

Also discuss with said STEP solicitor what is intended by "as long as he needs", and what would trigger the ending of that right, and what might happen if, for example, he was able to continue to live independently but needed somewhere smaller / level access / disability friendly. If he'd be in a position to fund such a purchase himself, then clearly that would be a time to sell the house and pass the proceeds on to your family. And that would apply even if you were married / in a civil partnership.

RAS

Also, if he remarried or cohabited, would the new couple  be allowed to remain indefinitely? We've also seen some shocking practices when the survivor sold or tried to sell a property and massively reduce the remainderman's (grandkids in your case) share of the equity.

And if he went into care, could he use the equity to pay for care or not? Which may leave your grandchildren with little or nothing.

You need a hard, hard, discussion with your STEP solicitor and time to think without influence before deciding what you want.

Keep_pedalling

RAS said:

Also, if he remarried or cohabited, would the new couple  be allowed to remain indefinitely? We've also seen some shocking practices when the survivor sold or tried to sell a property and massively reduce the remainderman's (grandkids in your case) share of the equity.

And if he went into care, could he use the equity to pay for care or not? Which may leave your grandchildren with little or nothing.

You need a hard, hard, discussion with your STEP solicitor and time to think without influence before deciding what you want.

None of that should happen with a properly drafted will and appointing suitable trustees (in this case probably the OPs children).

Smidge1524

Would this work? On my death ownership of my property would go to my two daughters. At that point an approved single tenancy agreement would come into force.  That being; my partner of over 12 years stays in the property as long as he needs.  He would pay a nominal rent to my daughters and be responsible for all utility costs. On going maintenance work / costs would be by mutual agreement.  As my daughters would have to pay tax on the “rent” and the property was already my partner’s home for many years could he stay rent free or would a nominal rent amount be acceptable if below a national average? 

As unmarried what would be my partner’s rights? 

Keep_pedalling

Smidge1524 said:

Would this work? On my death ownership of my property would go to my two daughters. At that point an approved single tenancy agreement would come into force.  That being; my partner of over 12 years stays in the property as long as he needs.  He would pay a nominal rent to my daughters and be responsible for all utility costs. On going maintenance work / costs would be by mutual agreement.  As my daughters would have to pay tax on the “rent” and the property was already my partner’s home for many years could he stay rent free or would a nominal rent amount be acceptable if below a national average? 

As unmarried what would be my partner’s rights? 

That would give your daughters the unenviable responsibility of being landlords. It does not provide your partner with the security that an IPDI trust would as there is nothing stopping your daughters ending the tenancy. The death, divorce or bankruptcy of one of them could also see your partner loose their home.

RAS

Please go and see good STEP solicitor. They specialise in complex inheritance situations.

K_p has already suggested an IPDI trust with your children as trustees. You choose who receives the asset when your partner dies or otherwise leaves.

Done properly this prevents

Your partner being "evicted" by your children except in specified circumstances.
Your children being liable for CGT when the house sells.
Your children becoming landlords and being liable for the upkeep of the property and being hit by tax and  landlord's responsibilities, for which there are legal penalties for non-compliance. 
And the risks of the asset affecting SDLT, divorce, insolvency and benefits.  

There are probably other considerations which I haven't listed.